Brent Crude Exceeds $100 After Four Months and Closes the Week with a 13 Percent Increase
While Brent crude exceeded $100 amid Middle East conflict and supply concerns, the CBRT kept its policy interest rate constant at 37 percent.
Driven by supply concerns triggered by conflicts in the Middle East and attacks on energy facilities, Brent crude has climbed above $100 for the first time in approximately four months, heading toward a 13 percent weekly gain. While these developments are closely monitored in global markets, the Central Bank of the Republic of Turkey announced that it kept its policy rate unchanged.
Global Markets and Oil Prices
Attacks targeting energy facilities and critical maritime transportation routes in the Middle East have heightened concerns regarding oil supply. Both Brent crude and US West Texas Intermediate (WTI) crude are expected to finish the week up by about 13 percent, with Brent projected to record a weekly close above $100 for the first time in roughly four months.
Supply Concerns and Regional Risks
The primary drivers behind the rise in oil prices include conflicts in the Middle East and attacks directed at major maritime trade routes. The Houthi movement, aligned with Iran, seizing control of Yemen's Mocha Port has posed new risks for maritime transport in the Red Sea, and it was noted that tanker traffic through the Strait of Hormuz remains limited.
Diesel Prices Rose in the US
Disruptions in oil supply caused by the US-Iran war were compounded by Ukraine's attacks on refineries in Russia. According to data from the price tracking platform GasBuddy, the national average diesel price in the US surpassed $6 per gallon on Thursday for the first time.
China's Demand and OPEC Decisions
While the demand from China, the world's largest crude oil importer, remains significant for the markets, OPEC lowered its global oil demand growth forecast for 2026 to 380,000 barrels per day. The organization revised this forecast downward for the fifth consecutive time, while oil production also decreased by 640,000 barrels per day in August.
Central Bank Keeps Interest Rate Unchanged
The CBRT Monetary Policy Committee kept the one-week repo auction rate, which is the policy interest rate, at 37 percent during the year's 6th meeting. In the Central Bank's statement, attention was drawn to the sluggish course of domestic demand, while it was noted that energy prices remaining high due to geopolitical developments pose an upward risk regarding inflation.