Oil settles at $116 after Tehran names Gulf data centers as strike targets

Iran has listed Gulf data centers and artificial intelligence infrastructure as potential targets for retaliation, a declaration that sent oil prices to their highest point in six months. The conflict between diplomatic maneuvering and military preparation is now directly pricing into the global energy market.

Brent crude, the international benchmark, jumped roughly 3.5% on Friday. At one point, the price crossed the $117 per barrel mark, the first time it has done so since April. Although the price dipped slightly in the final hours of trading, it closed more than 2.7% above the previous day, settling just over $116 per barrel.

The price spike followed statements from Tehran indicating that a new joint US-Israeli offensive would trigger strikes against oil facilities, undersea cables, and digital hubs in the Gulf. Market analysts attribute the volatility to reports that Washington is weighing renewed military strikes after the US midterm elections. This timing suggests a move away from purely diplomatic solutions.

Richard Hunter, a broker at Interactive Investor, noted that the shift in strategy was enough to trigger the price surge. He observed that what many observers initially viewed as a brief conflict is now entering its eighth month. For context, Brent crude traded at approximately $72 per barrel in February, before the war began. By the end of April, prices had touched $126 per barrel.

Tensions on the ground have intensified throughout the week. The Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the Strait of Hormuz on Wednesday. The strait serves as a critical chokepoint for global oil shipments, and recent incidents have increased the risk for vessels transiting the area.

In response to the instability, the US State Department ordered some diplomats and the families of US government employees to leave Saudi Arabia. The kingdom has faced continued attacks from Houthi rebels based in Yemen. Susannah Streeter, chief investment strategist at Wealth Club, said fears are mounting that American and Israeli forces may target Iran’s energy infrastructure after the US elections on November 3.

Streeter added that the journey across the Strait of Hormuz remains dangerous due to projectiles fired at maritime traffic. She also pointed to Ukraine’s bombardment of Russian diesel refineries as an additional factor straining global supply chains. These overlapping conflicts are keeping a lid on global energy availability.