Oil prices surge above $111 as Saudi attacks raise supply fears
Brent crude climbed above $111 a barrel as Houthi attacks in Saudi Arabia and incidents involving vessels near the Strait of Hormuz heightened concerns about…
Disruptions around major Middle East oil routes are raising fresh concerns for global energy supplies. Oil prices surge above $111 a barrel as Houthi attacks in Saudi Arabia and incidents involving vessels near the Strait of Hormuz fuel fears of further disruption.
Brent crude futures reached $112.68 during Thursday’s session, their highest level since May 18, before trading at $112.01 a barrel by 1311 GMT, Reuters reported. U.S. West Texas Intermediate crude rose to $100.09 earlier in the session and later stood at $99.56.
The latest price rise followed attacks by Yemen’s Iran-aligned Houthis on targets in Saudi Arabia on Wednesday. Reuters reported that two people were killed in a drone attack on a Saudi oil field, while an attack at a civilian airport in Dammam killed one person and wounded eight. The Guardian reported two deaths at the airport, a discrepancy not resolved in the available reports.
The impact reaches beyond oil traders: higher crude prices can add pressure to fuel costs, while threats to shipments in a key exporting region raise concerns about supply reaching markets. The sources also report a warning from American Airlines that high fuel costs would push it into a loss this year.
Vessel incidents add to supply concerns
Iran’s Islamic Revolutionary Guard Corps Navy said four vessels involved in what it called illegal oil transfers in the northern Gulf were hit and caught fire after its forces tracked them on Wednesday. The force also said three other vessels collided with mines west of the Strait of Hormuz.
Those claims add to concern about shipping and crude flows through the region. Reuters quoted Tamas Varga, an analyst at PVM Oil, saying reports of exports exceeding pre-conflict levels were outweighed by attacks on ships in the strait and Houthi strikes on Saudi Arabia and its oil infrastructure.
“No de-escalation is anticipated until the US midterm elections, which should keep oil prices elevated,” Varga said.
There are signs of continued strain on production and logistics elsewhere. Libya’s National Oil Corporation chief told Reuters that a valve on a pipeline connecting the Hamada and Tahara oilfields to Zawiya port had been shut, reducing production at both fields.
At the same time, Morgan Stanley analysts estimated that Middle East crude oil exports were around 17 million barrels per day last week. The Guardian, citing Kpler data, reported that Persian Gulf oil exports had risen above prewar levels, partly because more oil was moving overland through pipelines to the Red Sea and Gulf of Oman. The export data offers a counterpoint to the new security risks, but does not remove concerns over attacks on infrastructure and vessels.
U.S. orders personnel to leave Saudi Arabia
The U.S. government ordered non-emergency personnel and their families to leave Saudi Arabia as attacks increased. Reuters reported that the State Department also planned to withdraw family members from a number of other U.S. missions in the Middle East.
Saudi Aramco instructed staff to evacuate its headquarters in Dhahran and work remotely, according to six people with knowledge of the matter cited by Reuters. The move came after the attacks in Saudi Arabia, including the strike on an oil field.
Oilprice.com reported Brent at $111.10 a barrel and WTI at $98.98 at the time of writing, with both contracts up by around 2% from Wednesday. Later market levels cited by Reuters were higher. That sequence shows how prices moved during Thursday’s trading as investors weighed fresh attacks against the reported recovery in regional exports.
Reuters reported that Brent had touched $112.68 a barrel, its highest level since May 18.
Source: oilprice.com
