Brent Set for Record Monthly Surge

Brent crude fell below $115 per barrel, retreating from multi-month highs as renewed diplomatic efforts to ease tensions between the US and Iran raised hopes of avoiding further disruptions to energy supplies. Security officials from Saudi Arabia, Pakistan and Turkey were expected to meet Iranian leaders to revive negotiations and prevent the conflict from spreading. Prices also came under pressure as crude shipments through the Strait of Hormuz recovered to near prewar levels despite continued attacks on vessels. US Central Command reported that more than 1.5 billion barrels had passed through the strait with American assistance since summer, even as Washington maintained a blockade of Iranian ports. Meanwhile, concerns that sustained high prices could weaken global oil demand added to the downward pressure. However, the diplomatic outlook remains uncertain, with fears that strikes against Iran could resume following this week’s Israeli elections and next week’s US midterm elections.

Brent crude fell toward $115 per barrel on Monday, retreating from multi-month highs despite fears that strikes against Iran could resume following this week’s Israeli elections and next week’s US midterm elections. President Donald Trump said on Sunday that he would soon decide whether to pursue a deal with Tehran or restart military operations, as threats from Iran and the Houthis against Americans in the Middle East continue to escalate. Iran is reportedly prepared to retaliate, potentially targeting Israel and the UAE. Meanwhile, clashes between Saudi Arabia and Iran-backed Houthi rebels intensified over the weekend, with the rebel group claiming to have targeted King Khalid International Airport in Riyadh in response to Saudi strikes on Sanaa and other parts of Yemen on Saturday. Despite these developments, Middle Eastern crude exports have recovered to near prewar levels, although a renewed escalation in the conflict could further disrupt regional energy supplies.

Brent crude rose above $116 a barrel on Friday, reaching an over 4-year high as expectations grew that the US could resume strikes against Iran in the coming weeks. US President Trump said Wednesday that Washington was not negotiating with Tehran and that something would happen “fairly soon.” Reports indicate that the US and Israel are planning fresh strikes on Iran after the midterm elections. Meanwhile, Iran’s army chief said the country’s military was fully prepared for “asymmetric warfare” after strengthening its capabilities. Iran-allied Houthi militants have continued attacks on Saudi Arabia, prompting the US State Department to order non-essential personnel to leave the country. Oil giant Saudi Aramco also instructed staff to evacuate its Dhahran headquarters and work remotely following a series of attacks. On the week, brent crude prices rose more than 6%.