Brent Crude Surpasses $110 Amid Renewed Attacks in Saudi Arabia, Sparking Oil Supply Concerns
Oil prices rose on Thursday, with Brent crude surpassing $110 per barrel. This increase followed recent Houthi attacks in Saudi Arabia, prompting the U.S. to order the evacuation of some diplomats and their families from American missions in the Kingdom. Concerns regarding shipping safety and oil supplies in the region continue to loom.
WTI crude was trading at $98.05, up 90 cents or 0.93%, while Brent crude rose by $1.15 or 1.06% to reach $110. U.S. officials indicated plans to withdraw family members from several other American missions in the region. The heightened security concerns stem from a series of attacks by Yemen’s Iran-aligned Houthis, which included a drone strike on a Saudi oil field that resulted in two fatalities and an assault on a civilian airport in Dammam that left one person dead and eight injured.
Shipping risks extend beyond Strait of Hormuz
The threat to energy supplies has expanded to maritime routes beyond the Strait of Hormuz. Kpler data revealed at least 18 attacks on shipping in the past two weeks. Analysts from LSEG warned that Iran is targeting tankers further afield, including in the Gulf of Oman, jeopardizing Gulf crude loadings and ship-to-ship transfers that are vital for regional operations.
Iran’s leadership has made statements amid these tensions. Foreign Minister Abbas Araqchi asserted that Iran is fully prepared to defend itself, while President Masoud Pezeshkian remarked that the U.S. cannot expect dialogue while imposing blockades and threats against Iran.
US crude inventories fall, distillate stocks rise
According to data from the U.S. Energy Information Administration (EIA), U.S. crude inventories fell by 3.06 million barrels last week, totaling 412.5 million barrels. This decline exceeded the 820,000-barrel drop anticipated by analysts in a Reuters poll. In contrast, distillate inventories, which encompass diesel and heating oil, rose by 1.68 million barrels to 104.3 million barrels, contrary to analysts’ expectations of a 1.16 million-barrel decrease.
Additionally, the Trump administration is offering to loan nearly a third of the U.S. emergency heating oil reserve, which holds one million barrels. This move aims to mitigate rising prices linked to diesel shortages exacerbated by conflicts in Iran and Ukraine. Meanwhile, Russian President Vladimir Putin met with U.S. Special Envoy Steve Witkoff in St. Petersburg to discuss efforts to end the war in Ukraine, with plans for U.S.-mediated peace talks potentially resuming next month.
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