Brent oil hits $110 for the first time since May as Iran steps up Hormuz attacks

Brent crude touched $110 a barrel on Friday 16 October for the first time since May, before closing at $109.86, up 3.7% on the day, CNBC reported. US benchmark West Texas Intermediate rose 3.5% to settle at $101.41. WTI gained more than 10% over the week and Brent nearly 5%.

The Brent oil price is the one that matters most for Pakistan, since the country's imported crude and refined fuel are priced off Gulf and world benchmarks.

What pushed oil up

Three conflicts hit supply at once, according to CNBC:

• Strait of Hormuz. At least nine tankers and cargo ships have come under attack near Hormuz since Sunday as Iran tries to choke off exports through the strait. US Central Command said Iran sank the container ship GFS Pride on Wednesday; Singapore's maritime authority said its crew was evacuated safely. The International Maritime Organization counted three seafarers injured and two missing this week.
• Saudi Arabia. Saudi forces intercepted several missiles over the Red Sea on Friday, including one heading for the Yanbu oil export terminal, a military spokesman said. Iran-allied Houthi fighters in Yemen have fired at the kingdom repeatedly this week.
• Russia and Ukraine. The "energy ceasefire" President Trump tried to broker has unravelled, and President Zelenskyy said Ukraine would resume strikes on Russian refineries.

Shipments through Hormuz were 9.4 million barrels a day in the week to Wednesday, about 70% of the pre-war average, according to Kpler data cited by CNBC. US commercial crude stocks also fell by more than 8 million barrels in the week to 9 October, the Energy Information Administration said, after Hurricane Isaias shut in Gulf Coast output.

What it means for Pakistan

Pakistan now revises fuel prices every few days in line with world prices. The latest notification still cut petrol by Rs 3.93 to Rs 386.30 a litre from Saturday, but those prices were set before Friday's jump. If Brent holds near $110, the next revisions are more likely to go up than down.

A dearer barrel also means a bigger import bill paid in dollars, which puts pressure on the rupee and on the current account, already in deficit by $356 million in September. To see how a change at the pump hits your monthly spending, use the fuel cost calculator.

The numbers

US diesel averaged $6.33 a gallon on Friday, more than 70% above a year earlier, according to AAA data cited by CNBC.