Oil rises as Middle East attacks increase uncertainty over flows

Oil prices surged as heightened attacks in the Middle East increased concerns over energy supplies from the Persian Gulf. West Texas Intermediate approached $95 per barrel, after edging upwards the previous day, while Brent closed below $106 on Tuesday. The United States reportedly assisted in transporting over 19 million barrels of crude through the Strait of Hormuz, despite Iranian attacks on tankers in the waterway threatening recent improvements in Gulf supply nearing pre-war levels.

Saudi Arabia intercepted missiles and drones launched by Yemen’s Houthis, who continue to launch missiles and drones, highlighting the ongoing conflict. A major attack targeted the headquarters of Saudi oil giant Aramco, further increasing geopolitical tensions. Brent, which rose more than 70% this year, faced intensified risks due to the ongoing US-Iran war.

Oil tanker traffic through the Strait of Hormuz has decreased as supertankers avoid the region due to security concerns. Despite the volatility, Saudi Arabian oil production has shown resilience, increasing by a third in September after reaching a low not seen in over three decades.