Global oil prices climbed to their highest levels in more than five months as escalating tensions in West Asia raised fears of fresh military conflict and disruptions to energy supplies.
Brent crude, the international benchmark, briefly reached $115 a barrel on Friday before trading around $114.57. US West Texas Intermediate (WTI) crude also rose, reaching approximately $100.95 a barrel, according to Reuters.
Iran Warns of Wider Retaliation
- The price rise came amid warnings from Iranian officials that a renewed military attack by the United States and Israel could trigger retaliation against critical infrastructure across the Gulf.
- Iranian security officials told Reuters that Tehran had developed plans to target undersea communications cables if the conflict resumed. Iranian officials have also warned that oil facilities, data centres and artificial intelligence (AI) infrastructure in the region could become targets.
- The threats raise concerns that any renewed conflict could extend beyond military installations and affect energy production, communications and technology services.
Gulf Energy Supplies Face Growing Risks
- The latest market rally also reflects concerns about attacks affecting regional oil production and transportation.
- Reuters reported that attacks by Yemen’s Houthi movement on Saudi Arabia had heightened fears of further disruption. Saudi Aramco reportedly ordered the evacuation of its headquarters in Dhahran as tensions intensified.
- The Strait of Hormuz remains a major concern for energy markets because it is a critical route for global oil shipments. Any prolonged disruption to shipping through the strait could delay deliveries, increase transport and insurance costs, and place additional pressure on crude prices.
Why Undersea Cables and AI Facilities Matter
- Iran’s warnings have added a new dimension to the crisis by raising concerns about the security of digital infrastructure.
- Undersea cables carry international internet traffic, while data centres support cloud computing, online banking, business services and AI operations. Damage to these systems could disrupt communications and commercial activity across several countries.
- However, analysts cited by Reuters noted that less than 1% of international internet bandwidth passes through the Strait of Hormuz. The wider impact of any cable damage would depend on the number of cables affected and the availability of alternative routes.
What Higher Oil Prices Could Mean
- Sustained increases in crude oil prices could affect fuel costs, transportation, manufacturing and inflation in countries that depend heavily on imported energy.
- For India, higher international crude prices could increase the cost of oil imports and put pressure on the country’s trade balance. The eventual effect on domestic petrol and diesel prices would depend on several factors, including global price movements, exchange rates, government taxes and domestic pricing decisions.
- Oil prices could remain volatile as markets monitor developments involving Iran, the United States, Israel, Gulf countries and regional shipping routes.
Diplomatic Developments Remain Crucial
- The immediate outlook will depend on whether regional tensions lead to further attacks or whether diplomatic efforts can prevent renewed large scale fighting.
- For now, the latest price movement reflects market fears about potential supply disruptions rather than confirmation that all the threatened infrastructure has been attacked.
Business Galaxy’s report: Oil prices have reached a five month high amid renewed conflict concerns. Any further escalation could affect global energy markets, shipping costs and economic stability, but the scale of the impact will depend on actual disruptions and subsequent diplomatic developments.
Sources: Reuters and The Guardian, October 23, 2026.
Business Galaxy: Reporting Facts. Shaping Futures.
