Oil prices climbed Wednesday as worries over Middle East supply disruptions keep the market on edge, with attacks on tankers near the Strait of Hormuz and Saudi energy facilities denting sentiment.

Brent crude futures gained 1.22% $110.13 a barrel, while U.S. West Texas Intermediate crude rose 1.11% to $98.92 a barrel.

Iran’s Revolutionary Guards said Tuesday that naval mines had prevented three tankers attempting to pass through the Strait of Hormuz using routes Tehran deemed unauthorized.

“Two violating oil tankers were set ablaze and halted due to the explosion of mines planted by the brave sailors of the IRGC Navy at an illegal crossing point in the southern part of the Strait of Hormuz,” IRGC said in a statement published on their official Sepah News website.

Adding to regional worries, Yemen’s Houthi militants claimed responsibility on Monday for strikes targeting Saudi Aramco facilities in Yanbu, the Shaybah oilfield and airports in Riyadh and Abha.

The escalating tensions have also sent global oil shipping costs soaring, adding another layer of pressure to energy markets.

The global average crude freight rate has surged above $20 per barrel, compared with just $3 a year earlier, according to a Goldman Sachs report published Tuesday. While rates have eased slightly in recent days, they remain roughly seven times higher than a year ago.

Goldman estimated that war-risk premiums associated with crossing the Strait of Hormuz accounted for about $7 of the $20 year-on-year increase in average crude freight rates, while ship-to-ship transfers outside the Persian Gulf contributed another $4.

The investment bank warned that elevated shipping costs could widen price differences between crude grades, squeeze refiners’ profit margins and ultimately push up refined fuel prices.

“High freight costs have weighed particularly heavily on Asian refineries’ net margins, threatening their refined product output, which could then raise global refined product prices,” Goldman Sachs analysts wrote.

Crude oil prices rose sharply Friday as Iran escalated attacks in the Strait of Hormuz, Houthi militants fired missiles at Saudi Arabia and Ukraine vowed to keep striking Russian refineries.

Brent futures hit a session high of $110 per barrel for the first time since May before easing slightly to close at $109.86, a gain of 3.7%.

U.S. West Texas Intermediate rose 3.5% to settle at $101.41 per barrel. WTI added more than 10% this week while Brent advanced nearly 5%.

Saudi Arabia intercepted several missiles fired over the Red Sea on Friday, including one that was heading toward the oil export terminal Yanbu, a military spokesman said. Three drones were also destroyed in the kingdom’s Riyadh and southern regions, the military said.

Iran-allied Houthi militants in Yemen have repeatedly fired at Saudi Arabia this week. One of Aramco’s administrative buildings in Dhahran was hit on Tuesday, the kingdom’s energy ministry said. The militants attacked Riyadh’s international airport on Oct. 10, killing 12 and injuring more than 300.

In the Strait of Hormuz, at least nine tankers and cargo ships have come under attack since Sunday as Iran tries to choke off oil exports through the waterway. Iran sank the container ship GFS Pride on Wednesday, U.S. Central Command said. The crew of the Singapore-registered ship was safely evacuated, according to Singapore’s maritime authority.

The attacks have left three seafarers injured and two missing this week, according to the International Maritime Organization.

Crude exports through Hormuz have pulled back after touching prewar levels in September. Shipments stood at 9.4 million barrels per day for the week ended Wednesday, about 70% of the average before the Iran war, according to data provided by the energy researcher Kpler.

Meanwhile, the “energy ceasefire” that President Donald Trump tried to broker between Ukraine and Russia has quickly unraveled. The Kremlin continued attacking Ukrainian infrastructure despite the supposed truce. President Volodymyr Zelenskyy said Kyiv would resume strikes on Russian refineries in retaliation.

Diesel prices have surged this year due to Ukraine’s attacks on Russian refineries and Iranian strikes on energy infrastructure in the Middle East. The fuel cost an average of $6.33 a gallon in the U.S. Friday, more than 70% above the same period last year, according to AAA data.

U.S. crude oil prices were also driven higher by a big decline of more than 8 million barrels for the week ended Oct. 9 in commercial inventories due to production shut-ins on the Gulf Coast from Hurricane Isaias, according to the Energy Information Administration.

As I’ve reported, prices for oil delivery have skyrocketed. Last week, a VLCC (aka a “supertanker” in non-shipper parlance) was chartered from the U.S. Gulf Coast to China for $76 million. Another very large crude carrier went for $77 million from the U.S. to South Korea. That’s 10 times more than the price of the same trip less than one year ago.

Assuming these ships hold about 2 million barrels of oil, that charter price means each barrel on the ship costs about $38 over the price of the oil itself.

I’m certainly not saying to avoid looking at oil futures prices, but you need to know that the price on the CNBC screen or CNBC.com isn’t always the full price being paid. These days, any company that needs oil shipped by sea, rail or truck will pay a hefty premium over the price of the oil itself. So, while the volume of oil moving through Hormuz is closing in on pre-war levels, costs are not. And there’s no sign that they’re going anywhere but up.

You know what else is up? The stocks of the shipowners. Look at their moves this month and this year.

***

On a more serious note, I want to express my condolences for the awful attacks on the airport in Riyadh, Saudi Arabia. The cowardly strike on civilians—some of whom were religious pilgrims—took the lives of at least 14 people and injured more than 300.

The airport was attacked at least three times as travelers and energy industry professionals from around the world were flying into Riyadh for the World Petroleum Council conference. I was scheduled to fly in on Saturday, but the trip was canceled because of the strikes. The WPC went on as planned — here’s one panel that took place Tuesday — and I look forward to seeing all my global energy friends again soon.

Thanks for reading—and watching. Be safe in these crazy and often scary times.

Brian

The supercap oil and gas stock to watch right now is Shell (SHEL). Shell is not a shell of its former self. It’s back to being what energy investors wanted: a major player in global energy, focused on what it does best. Shareholders are being rewarded.

Shell hit a new high this week. While analysts remain bullish, the stock is getting close to its target price.

Shell may be underappreciated for its huge liquefied natural gas business. RBC analyst Biraj Borkhataria writes: “Without a sustained resumption in Qatari volumes and with European storage levels…

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Tensions in the Strait of Hormuz have risen after a Singapore registered ship was sunk in the critical waterway, and Iran said it was “counting the moments” until it can strike U.S. warships.

Oil markets responded to mounting worries, with prices of the critical commodity extending gains, while U.S. President Donald Trump’s deal with Russia for supplying diesel is unlikely to materially impact prices.

A major escalation in the Strait of Hormuz has seen a container ship sunk in the waterway, as Iran escalated its attacks on commercial vessels.

The GFS Pride, registered in Singapore, sank after it was struck by an unidentified projectile and caught fire. The ship’s 21 crew members were safely evacuated and no injuries were reported, according to the Maritime and Port Authority of Singapore.

“Such attacks are unprovoked, unjustifiable and a breach of international law,” the Singapore maritime authority said in a statement Wednesday.

A second vessel, the GFS Giselle, was also hit and sustained damage to its hull, but managed to arrive at safe anchorage and none of its crew were hurt, the authority added.

Tehran has also ratcheted up its rhetoric, saying it was ‘counting the moments’ until it can strike U.S. warships in the Strait.

Islamic Revolutionary Guard chief Ali Ozmaei reportedly said Wednesday, “If the Americans think the Strait of Hormuz is open, let them come closer. We are impatient to sink American warships.”

Washington’s forces, however, disputed the claims of Iranian control, with U.S. Central Command saying “American forces and regional partners clearly control the Strait of Hormuz.”

The recent development, along with additional attacks by Tehran-backed Houthi rebels on oil giant Saudi Aramco’s facilities in Saudi Arabia, have pushed oil prices higher, with international benchmark Brent up at $106.06 a barrel, while U.S. West Texas Intermediate advanced to $95.09 a barrel.

High energy prices have also contributed to a hot inflation report in the U.S., with the consumer inflation rate for September up 3.7% year on year, higher than expectations of 3.6%.

The energy index jumped 5.2% as tensions continued between the U.S. and Iran in a war launched in late February that shows no signs of ending anytime soon.

Core CPI — which strips out prices of food and energy — was up 2.6% on an annual basis, compared with estimates of 2.5%.

Markets slipped on the news, with the S&P 500 pulling back 1.11% and the Nasdaq Composite shed 1.88%. Tracking Wall Street declines overnight, Asia markets tumbled Thursday.

The CPI report comes as oil prices remain elevated and consumers pay more for gasoline, which is averaging at $4.33 a gallon, compared to about $3.08 per gallon…

Constraints on the diesel market will extend well into next year, the International Energy Agency warned on Wednesday.

In its October Oil Market Report, the IEA said supply would remain tight into the latter half of 2027.

A counter-seasonal tightening in gasoil markets in the third quarter, combined with “much heavier-than-normal inventory declines” in the preceding three months, had “deprived global gasoil markets of crucial stock cover ahead of the peak winter demand season,” the IEA said.

Last month saw global diesel exports drop by 700,000 barrels a day year-on-year, according to IEA data. A 1.3 million barrels per day loss from Russia and the Middle East was “only partly offset by higher supply from other sources,” the agency said.

But while higher prices had weakened oil demand more broadly, the IEA said “relatively price inelastic diesel demand has remained strong,” supported by government measures aimed at easing high prices for consumers.

“Falling inventories, soaring cracks, and steepening levels of backwardation have signalled the need for additional supplies,” it said. “However, even with a rapid recovery expected in refinery throughputs into year-end, gasoil supply falls short of meeting demand in 4Q26, suggesting that the replenishment of lost inventories, outside of typical seasonal fluctuations, is unlikely before [the second half of 2027].”

The IEA pointed out that wholesale diesel prices exceeded $200 a barrel in Singapore in mid-September and reached all-time highs of around $220 per barrel in Europe and the United States.

“Retail diesel prices have risen in tandem to record levels in most major economies,” it said in its report. But it warned that tensions in the crude freight market meant delivered diesel prices in the dominant gasoil importing markets – Europe, Africa and Latin America – could rise again in the coming weeks.

U.S. diesel prices hit $6 a gallon for the first time last month, as the Iran war continued to impact global energy markets, with some market watchers warning elevated prices could linger for months to come.

Last week, U.S. President Donald Trump said he had made a deal with Russian counterpart Vladimir Putin for Russia to immediately supply 300,000 metric tons of diesel to the global market, in a bid to offset sharp price rises sparked by Iran war-driven supply constraints.

Russian energy has been harshly sanctioned by Western governments since Moscow’s full-scale invasion of Ukraine in 2022.

Trump’s deal with Putin faced bipartisan condemnation in the U.S., with lawmakers in Europe also criticizing the move. Speaking at the IMF meetings in Bangkok on Wednesday, Valdis Dombrovskis, European Commissioner for the…

The chief executive of U.S. oil giant Chevron on Wednesday warned it would be “unwise” for the Trump administration to move forward with a diesel export ban, saying the policy runs the risk of making the supply situation worse.

“The U.S. has been a reliable supplier to the world at a time when it needs it,” Chevron CEO Mike Wirth told CNBC’s “Squawk Box Europe” in an exclusive interview on Wednesday.

“And I think it would be unwise for the U.S. to create questions in the minds of our allies and our partners as to whether or not we will be there with reliable supply when times are difficult — and so, there are other options,” he added.

His comments come as rising Middle East crude exports and an emergency G7 stockpile release appear to have helped to ease supply fears, although energy market participants remain on edge as Saudi Arabia and Iran-backed Houthi forces exchange attacks.

The U.S.-Iran war has severely disrupted shipping through the Strait of Hormuz, a narrow waterway that typically handles around 20% of the world’s oil and liquefied natural gas supplies, sending shock waves through the global economy.

U.S. President Donald Trump, who has cooled on the prospect of authorizing a diesel export ban after G7 countries agreed to release diesel and crude oil from their emergency reserves, recently allowed the use of cheaper red-dyed diesel to be used more broadly in part of a push to bring down record-high fuel costs.

Trump signed an executive order Monday evening stateside to temporarily allow truckers and farmers to use red-dyed diesel — which is exempt from highway fuel taxes — and deferred related taxes on the fuel through the end of this year.

The tax-free diesel is typically used by farm equipment, construction machinery, trucks and other off-road vehicles. It is therefore exempt from a 24.4-cent-per-gallon tax applied to diesel fuel sold for highway transportation.

Saudi Aramco CEO Amin Nasser said earlier this week that it could take up to two years to rebuild global oil inventories, warning that the squeeze on supplies could yet get worse as the U.S.-Iran war drags on.