The Next Major Oil Supply Shock Could Come From Saudi Arabia
Houthi strikes on Saudi oil infrastructure threaten production as Brent crude hits $108 and the Brent-WTI spread widens to $5. The LNG Market Gets a New War Premium - Asian liquefied natural gas prices soared to their highest since December 2022, as repeated attacks on tankers across the Middle East and Europe’s worsening winter outlook pushed JKM above $30 per MMBtu. - Whilst China’s import…
The ongoing Saudi-Houthi conflict has brought oil supply disruptions to the forefront of market concerns. Yemen's militias have expanded their attacks beyond infrastructure sites to target the Shaybah oilfield, heightening risks of Saudi Arabia having to curtail some production nationwide. The expiration of the November WTI contract contributed to a narrowing of global crude spreads, with Brent crude trading $5 per barrel above the US benchmark at $108 per barrel.
The first Houthi attack on an LNG vessel has heightened war risk premiums in the gas market, forcing the Qatari-owned al Kharsaah to take a rare journey through the Red Sea to deliver Qatari LNG to Poland. Europe's LNG imports have surged 9.5% compared to the 5-year seasonal average, with the TTF benchmark driving global LNG price increases despite EU storage levels remaining below 75% of capacity.
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