Geopolitical risk in the Middle East continues to weigh on energy markets. According to the UK's Maritime Trade Operations Centre, at least two ships were hit by unknown projectiles near Oman and Iran, one on Friday and one on Sunday. The attacks, which have been occurring for weeks, are fueling doubts that global oil trade through the Strait of Hormuz can recover anytime soon, especially as Iran holds firm on its conditions for reopening the passageway.
In response to the resulting fuel supply crisis, G7 countries agreed on Friday to release a substantial amount of diesel stocks in an effort to curb rising fuel costs. Meanwhile, OPEC+ confirmed yesterday that its oil production targets would remain unchanged for November. Oil prices fell on Friday after the G7 announcement, posting a negative week, but Brent crude is still trading above $100 a barrel this morning, with U.S. crude little changed.
The energy-driven volatility also weighed on broader markets. Despite Friday's stock rally, both the Dow Jones Industrial Average and the S&P 500 ended last week in the red. Investors now face a landscape where supply concerns, geopolitical tension, and policy responses are all competing to set the direction for prices and equities.