Oil prices rose sharply on Wednesday as attacks by Yemen’s Iran-backed Houthis on Saudi Aramco facilities and ongoing Russia-US diesel trade stirred uncertainty among traders.
Brent crude futures climbed 89 cents, or 0.8%, to $106.58 a barrel by 0030 GMT, reversing a 0.9% drop from the previous day. US West Texas Intermediate (WTI) crude rose 80 cents, or 0.9%, to $94.94 a barrel, building on a 0.4% gain from Tuesday.
The increase followed a Houthi assault on an administrative building owned by Saudi Arabia’s state oil company, Saudi Aramco, in Dhahran. The Saudi energy ministry said the attack caused a limited fire. Over the past week, the Houthis have launched ballistic missiles and drones in retaliation for Riyadh’s backing of Yemeni government forces. Saudi Arabia’s international airport has been hit four times in the same period, with a strike on Saturday killing 13 people.
“Supply concern stemming from conflict between the Houthis and Saudi Arabia is driving prices higher,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment. At the same time, he noted that expectations of increased Russian diesel exports to the US could limit price swings. Kikukawa projected WTI to trade between $90 and $100 a barrel.
Last month, Saudi Arabia raised its oil production despite disruptions linked to the US-Iran conflict. This contributed to a sharp increase in output from OPEC+, the Organisation of the Petroleum Exporting Countries and its partners, including Russia. OPEC confirmed the rise on Tuesday.
Iranian officials told Reuters that Tehran is deploying new tactics to target ships in the Strait of Hormuz. Their aim is to keep oil prices high and influence the upcoming US midterm elections.
Meanwhile, Russia’s government denied any direct connection between peace talks with Ukraine and its diesel export deal with the United States. Reuters had reported that US envoys told Ukrainian officials last Friday that the deal was part of an attempt to bring Russia back to negotiations over a peace settlement.
The diesel agreement remains a point of tension as Moscow and Washington navigate their complex diplomatic relationship amid ongoing conflict in Ukraine.
Oil markets remain sensitive to both geopolitical risks and shifts in supply. The recent Houthi attacks have underscored vulnerabilities in Saudi Arabia’s oil infrastructure, while Russia’s diesel exports to the US add a layer of unpredictability to global fuel supplies.
According to Joy Online.
