Brent oil trades above US$107 as Houthi-Saudi fighting escalates
On track for its biggest weekly gain since July, the global benchmark has surged over 6% in the prior session
Brent oil prices surged above US$107 per barrel as escalating tensions between Houthi rebels in Yemen and Saudi-backed forces threatened Middle East energy supplies. The global benchmark oil price climbed over 6% in the previous session, marking its biggest weekly gain since July. West Texas Intermediate also rose to near US$102 per barrel.
Yemen-based Houthis advanced towards coastal areas near the Bab al-Mandeb Strait, potentially disrupting shipping lanes. RBC Capital Markets analysts warned that a resumption of a full Saudi-Houthi war could drive oil prices higher. The conflict has brought about a recent spike in crude purchases by China and intensified fighting across the region, including assaults on Saudi energy facilities and US strikes on Iranian tankers.
Shipments of oil continue to transit the Strait of Hormuz, albeit with increased risks of attacks. The UK Maritime Trade Operations reported that two vessels were hit by unidentified projectiles west of Khasab, Oman, on September 10, underscoring the dangers faced by maritime traffic. Iran and the US are locked in prolonged conflict with no immediate end in sight, leading to concerns over potential disruptions to oil and natural gas flows.
Brent crude has risen nearly 80% this year, though it remains below its wartime high of above US$126 per barrel reached in April. European natural gas prices have also climbed, with refined products such as diesel seeing even steeper increases, fueled by the Russia-Ukraine war. Market participants are adjusting their expectations for the conflict's severity and duration.
US Treasury Secretary Scott Bessent announced that a major bank would be sanctioned as part of the campaign, alongside a naval blockade. An Iranian official acknowledged growing economic strain but vowed to continue fighting until the US demonstrates a commitment to cease aggression. White House advisers have indicated that the war could persist through the remainder of President Trump's term, which concludes in January 2029.
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- Oil Trades Near $107 as Houthi-Saudi Fighting Escalates bloomberg.com
