Oil falls from five-month high as supply intact despite fighting

Oil prices fell from a five-month high on Friday as traders evaluated whether Middle East oil supply remains near pre-war levels amid persistent regional conflicts. Brent crude hovered near $108 a barrel after surging nearly 4% on Friday, while West Texas Intermediate edged towards $100. A Saudi helicopter crashed near Yemen's border and Houthi rebels attacked Yanbu, a significant export port.

UK Maritime Trade Operations reported two tankers were hit in the Persian Gulf. US Energy Secretary Chris Wright told Fox News that Persian Gulf oil flows had rebounded to around 80% of their pre-conflict pace, although refined product shipments remained restrained. Wright mentioned ongoing discussions with European partners to release diesel reserves.

The global benchmark Brent oil has risen over 75% this year as escalating hostilities in the Middle East, alongside the Russia-Ukraine war, have limited supply. Refined products like diesel have outperformed oil, adding pressure to inflation and the global economy. Oil market analyst June Goh noted the markets are hesitant to embrace higher prices due to a subdued overall economic outlook, suggesting Brent could stay within a range near $100 a barrel.

Meanwhile, US President Donald Trump announced a diesel export agreement with Russia and exempted the nation's energy shipments from tariffs and sanctions as part of efforts to facilitate peace talks with Ukraine. Lawmakers are pushing for a bill to obstruct the fuel acquisitions amid Moscow and Kyiv's escalating hostilities. Russian President Vladimir Putin has proposed talks with Trump and Chinese leader Xi Jinping in November to resolve the four-year conflict, though US officials confirmed no agreement has been reached.