Global oil prices surged as Brent crude reached its highest level in over five months, driven by escalating tensions in the Middle East. The increase comes amid concerns that Houthi attacks in Saudi Arabia could disrupt energy supplies from the region.
Brent crude futures rose by 0.7% to $113.96 per barrel, after briefly hitting $114.72, a peak not seen since May 4. Meanwhile, US West Texas Intermediate (WTI) crude saw an increase of 1.1% to $100.57 per barrel. Despite these gains, Brent is on track for a third consecutive weekly gain of nearly 4%, whereas WTI is poised for a slight weekly decline of about 0.8%.
The market’s unease intensified following reports that Saudi Aramco had evacuated its headquarters in Dhahran due to the conflict between Saudi Arabia and Yemen-based Houthi forces. Analysts warn that continued attacks could hinder oil shipments and exacerbate existing supply shortages. Compounding these issues are uncertainties in shipping routes, fluctuating oil flows, and increased freight costs, all of which are putting additional pressure on the global energy market.
Security concerns also extend to the Bab el-Mandeb Strait, a crucial shipping lane linking the Red Sea with the Gulf of Aden. Prolonged disruptions in this area could lead to delays in energy deliveries and sustain high oil prices.
Further supply challenges have arisen in Libya, where the closure of a pipeline valve connecting the Hamada and Tahara oilfields to the Zawiya port has curtailed production at both sites. This development adds to the global oil supply woes.
In a related development, a Malta-flagged tanker carrying 40,000 metric tons of Russian diesel is en route to New York. This follows Russia’s decision to resume diesel exports to international markets, including the United States, as part of efforts to alleviate fuel price pressures.
The oil market is expected to remain highly sensitive to ongoing events in the Middle East, the scale of shipping disruptions, and the time required to restore impacted energy operations.