Oil rises as US orders diplomats to leave Saudi Arabia amid escalating tensions

Oil prices surged on Thursday as heightened attacks by Houthi rebels in Saudi Arabia prompted the United States to instruct some diplomats and family members to vacate its missions in the Kingdom. Brent crude futures climbed $1.29, or 1.2%, to $110.11 a barrel at 00:34 GMT, while US West Texas Intermediate crude surged 97 cents, or 1%, to $98.12. The previous day, Brent had remained largely unchanged, while WTI had slipped by 67 cents.

The US State Department intends to evict family members from several other US missions across the region, according to US officials speaking to Reuters. On Wednesday, Iran-aligned Houthis launched assaults on several targets, resulting in at least one death and eight injuries at a civilian airport in Dammam, and two fatalities in a drone strike on a Saudi oil facility. There were also explosions heard in Sirik, a southern Iranian city, though the cause and origin of the blasts remained unclear.

Iranian Foreign Minister Abbas Araqchi informed the Financial Times on Wednesday that Iran was fully prepared to defend its interests and that President Masoud Pezeshkian declared the US unable to expect dialogue while imposing sanctions and threatening Iran. Kpler data revealed at least 18 attacks on vessels over the past two weeks, while LSEG analysts cautioned that Iran was targeting tankers beyond the Strait of Hormuz, penetrating the Gulf of Oman and threatening Gulf crude shipments and ship-to-ship transfers supporting regional loadings.