Crude oil just blew past a level it hadn't touched in five months — and traders say the pain at the pump may only be getting started. Brent futures settled Friday at $109.86 a barrel, up $3.94 or 3.7% on the day and the highest close since May 19, according to a Reuters report. U.S. benchmark West Texas Intermediate wasn't far behind, closing at $101.41, its best finish since September 17. For the week, Brent rallied 4.9% and WTI an eye-popping 10.4%.

The spike came from two directions at once. In the Middle East, a Saudi-led coalition said it intercepted a ballistic missile aimed at Yanbu, a Red Sea port that lets Saudi Arabia route crude around the Strait of Hormuz — a chokepoint that normally carries roughly a fifth of the world's oil and has been disrupted since U.S. and Israeli strikes on Iran earlier this year. Attacks near Hormuz have intensified over the past ten days as Iran reportedly hits back against a U.S. port blockade and fresh sanctions.

Washington throws a wrench into the diesel deal

Meanwhile, on Capitol Hill, lawmakers introduced a bill Friday aimed at blocking a Trump administration arrangement with Moscow to release several hundred million barrels of Russian diesel onto world markets, according to Bloomberg's reporting. The bipartisan pushback reflects broad discomfort with any move that could let Moscow pad its war chest while the war in Ukraine grinds on. Keeping that Russian diesel bottled up would force refineries elsewhere to run harder to fill the gap — tightening supply just as the Middle East risk premium was building.

Adding fuel to the fire, Ukraine struck a Russian refinery this week and Russia's Ryazan plant was forced to suspend a crude distillation unit, feeding fresh doubt about how much fuel Moscow can actually export regardless of what Washington decides.

"MIDDLE EAST CONFLICT AND DOUBTS ABOUT RUSSIAN DIESEL SUPPLY ARE KEEPING TRADERS BUYING." — Dennis Kissler, BOK Financial

Energy Aspects noted that both benchmarks reversed earlier losses once escalation fears resurfaced, warning that "persistent escalation risks should keep prices supported." Data and analytics firm Kpler said intensified Iranian attacks have sharply reduced Gulf crude flows and expects only a slow, uneven recovery through Hormuz absent a broader political deal.

Governments aren't sitting still. The International Energy Agency agreed to release more than 20 million barrels of fuel from member reserves, and the U.S. issued a request for proposals to exchange up to 17 million barrels out of the Strategic Petroleum Reserve — moves aimed at calming a market that's now up double digits in a single week.

The timing is awkward for the Federal Reserve, which meets later this month already wrestling with sticky inflation. A sustained run at $110 oil threatens to push gasoline, diesel and shipping costs higher just as policymakers debate how much further borrowing costs need to fall — leaving traders, drivers and central bankers all watching the same volatile headlines heading into the new week.