Brent Oil Surpasses $101 Amid Saudi Attacks and US Storm Heightening Supply Concerns
Oil prices surged on Wednesday, with Brent crude surpassing the $101-per-barrel mark. The increase of over 1% was driven by fresh supply concerns that overshadowed optimism from rising crude supplies in the Middle East. Brent crude rose 1.02% to $101.60, while WTI crude climbed 1.05% to $90.38 amid worries about potential disruptions in Saudi Arabia and the US oil sector.
Supply Concerns Amid Rising Middle East Production
Recent forecasts from the US indicate that a storm developing in the Gulf of Mexico could become the first Atlantic hurricane of 2026 within two days. This storm poses a risk to oil and gas facilities, affecting areas that account for 15% of US crude production and 5% of natural gas production. Six refineries in the storm’s path, located in Gulf states, represent about 50% of the US’s total refining capacity of 18.2 million barrels per day.
Despite the looming storm, Saudi Energy Minister Prince Abdulaziz bin Salman reported an increase in oil supplies, with the East-West pipeline reaching 5.8 million barrels a day. Additionally, the head of Vitol stated that approximately 12 million barrels per day of crude oil and 2 million barrels per day of refined products had been shipped from the Middle East in the past week.
Mixed US Inventory Data
US inventory data presents a mixed picture for the oil market. Sources cited by Reuters indicate that crude and gasoline inventories fell last week, while distillate stocks saw a slight increase. Specifically, US crude inventories decreased by 2.09 million barrels for the week ending October 2.
Tensions in the Middle East have further complicated the supply landscape. The Saudi aviation authority reported that airports in Jazan and Najran were attacked twice on Monday evening amid escalating hostilities with Yemen’s Iran-backed Houthis. These attacks coincide with a major offensive by Saudi-backed Yemeni government forces to reclaim territory lost to the Houthis.
Analysts Predict Continued Price Pressure
Mukesh Sahdev, chief oil analyst at X Analysts in Sydney, noted that ongoing attacks and refinery outages are likely to sustain elevated oil prices. He stated, “Attacks and refinery outages are likely to keep the cracks elevated and scarcity will transmit to crude. Prices will stay elevated near a $100 level without any material de-escalation emerging.”
The broader geopolitical tensions involving Iran remain unresolved. US President Donald Trump expressed uncertainty regarding Iran’s leadership amid ongoing conflicts, stating, “Their leaders are gone, their second group of leaders are gone, and the biggest problem I have is nobody knows who the hell is running the country.” Iran’s foreign ministry spokesman countered that the US is well aware of Iran’s decision-making structure.
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