Oil prices approach Iran war highs, surging shipping costs trigger a second round of energy squeeze

1. Wall Street is increasingly worried that the situation in the Middle East may escalate into a full-scale regional conflict, disrupting global energy supplies. The Iran war has lasted for nearly eight months, and Brent crude oil rose 4% on Thursday, closing at $113.17 per barrel, marking the highest closing price since May 4. During Friday's Asian session, it reached a new high of $114.68 per barrel.2. The U.S. State Department, following attacks on Saudi oil fields and airports, ordered the evacuation of non-emergency government personnel and their families from Saudi Arabia. Analysts say that while this is a common security arrangement, it reflects the risks faced by local infrastructure. As a major oil producer, Saudi Arabia's situation has a broader impact on the market. Some believe that the U.S. withdrawal sends a signal different from the early stages of the war—Saudi Arabia was initially regarded as a backup plan if conditions in the Strait of Hormuz deteriorated, but now the market is concerned that even the backup plan carries risks.3. Traders are repricing assets, indicating that they are not fatigued by the ongoing conflict but expect the hostilities to continue beyond the U.S. midterm elections. Trump has repeatedly predicted that oil prices will fall after the midterm elections, but the recent escalation makes this expectation increasingly difficult to achieve.4. Price shocks are coming not only from benchmark oil prices. With shipping costs soaring, the market is facing a second round of pressure, which is also changing the global flow of crude oil. Over the past decade, freight costs were typically just a supporting factor in the oil market; now, transportation costs are almost as significant as the price of the commodity itself.5. According to International Energy Agency data, oil tanker freight rates reached historic highs in September; by mid-October, the cost of transporting crude oil from the Middle East Gulf to Asia on large oil tankers exceeded $37 per barrel, more than five times higher than before the war. Analysts say that global oil distribution patterns are experiencing long-term structural changes: Iraq, the United Arab Emirates, and Saudi Arabia are expanding transport routes and storage facilities beyond the Gulf, while record production in the United States, Canada, Brazil, and Guyana is gradually shifting the global energy focus toward the Western Hemisphere.