Oil prices rise as storms and air strikes threaten supply

Oil prices surged on Wednesday amid concerns over supply disruptions from a storm threatening US oil-producing regions and Houthi attacks on Saudi Arabia. Brent futures climbed 93 cents, or 0.92%, to $101.51 a barrel, while US West Texas Intermediate (WTI) crude rose 82 cents, or 0.92%, to $90.25. The storm forming in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 within two days, potentially impacting 15% of US crude oil and 5% of natural gas production in offshore areas.

Six refineries in the US Gulf states, which handle about 50% of the national capacity, could face disruption. US crude oil and gasoline inventories declined last week, while distillate stocks rose slightly. Saudi Arabia's crude oil output has been increasing, with around 12 million barrels per day leaving the Middle East via tankers in recent days.

However, attacks on two Saudi Arabian airports in Jazan and Najran, as well as further escalations in hostilities between Riyadh and Yemen's Iran-backed Houthis, have raised fears of production and refinery outages. Analysts predict that supply constraints will keep prices near the $100 level without significant de-escalation. The deteriorating US-Iran relations, with US President Donald Trump stating that the decision-making system in Iran is unclear, have also contributed to the price surge.