Key takeaways Brent crude climbs above $116 following Hormuz tanker attack Shipping disruptions threaten Gulf oil exports and global supplies Traders eye $120 as geopolitical tensions intensi
Oil prices climbed above $116 per barrel on October 30 after a tanker attack in the Strait of Hormuz renewed fears of disruptions to global energy supplies.
The expiring December Brent futures contract rose to approximately $117.15, gaining nearly 2%, while US West Texas Intermediate advanced toward $103.79. January Brent traded lower, near $113, reflecting the difference between the two delivery contracts.
The rally puts Brent on course for a roughly 13% monthly gain, as Middle East tensions continue adding a substantial geopolitical premium to crude prices.
Tanker Attack in Strait of Hormuz Sends Oil HigherThe latest rally followed reports that a tanker was attacked while traveling through the Strait of Hormuz, a crucial shipping corridor connecting Gulf oil exporters with international markets.
According to the UK Maritime Trade Operations, a small boat attached two explosive devices to the vessel, triggering an engine-room fire and temporarily disabling the tanker. The crew was reported safe, with no environmental damage identified.
The attack comes amid escalating threats to Saudi Arabia's energy infrastructure. Earlier this week, Yemen's Houthi movement claimed an attack on the Ras Tanura refinery, one of the kingdom's most important oil-processing facilities.
Saudi authorities have not independently confirmed damage to the refinery, but repeated incidents are keeping traders concerned about future disruptions.
The risks extend beyond immediate production losses. Higher shipping insurance, freight expenses and uncertainty over export routes can increase oil costs even when physical supplies remain available.
JPMorgan recently estimated Brent's fundamental value near $94 per barrel, implying a geopolitical premium exceeding $20 when prices trade above $115.
That estimate reflects the bank's supply-and-demand model rather than a prediction that Brent will immediately decline toward $94.
Oil Price Prediction: Can Brent Reach $120?Brent's recovery above $116 has brought the psychological $120 threshold back into focus.
The immediate resistance area sits around $117–$118. A sustained move above that range could open the door to $120, particularly if additional tanker attacks or confirmed production disruptions emerge.
However, the bullish scenario depends heavily on geopolitical developments rather than technical momentum alone.
If diplomatic negotiations between Washington and Tehran progress, some of the current risk premium could unwind. That could send Brent back toward $115, followed by $113 and potentially $110.
The market's sensitivity to supply risks is particularly significant because US emergency oil reserves have fallen to approximately 282.6 million barrels, their lowest level since 1982.
Although strategic reserves can provide temporary relief during disruptions, they cannot permanently replace lost production.
OPEC+ Meeting Could Determine Oil's Next MoveTraders are also preparing for the November 1 OPEC+ meeting, where seven major producers are expected to leave December output targets unchanged.
The group previously maintained its November production levels despite rising crude prices and persistent supply constraints. Its upcoming production decision could influence expectations for global supply heading into 2027.
