Oil prices rise as Houthis launch another wave of attacks on Saudi Arabia

Oil prices surged on Friday as Yemen's Houthi rebels intensified their attacks on Saudi Arabia, raising concerns about potential supply disruptions from the Middle East. Brent crude, the benchmark for two-thirds of the world's oil, saw a 1.1% increase to $114.50 a barrel, while West Texas Intermediate climbed 1.3% to $100.80 a barrel.

Brent, which had reached its highest level since May 4 on Thursday, was expected to close higher for a third consecutive week, while WTI was poised to finish lower. Edward Bell, head of research at MUFG, and Soojin Kim, a research analyst at the group, noted that oil prices remained supported by geopolitical risks, with both futures and WTI holding onto significant overnight gains.

The Houthis claimed responsibility for an assault on the oil loading port at Yanbu in Saudi Arabia, alongside strikes on Aramco facilities and Dammam airport over the past few days. Saudi Arabia's oil production and exports through the Strait of Hormuz remained near pre-conflict levels, albeit at higher shipping rates. The Houthis, backed by Iran, have been launching regular attacks on Saudi territory recently, with recent advances along Yemen's Red Sea coast near the Bab Al Mandeb strait, a crucial waterway for global crude supplies.

The Houthis have also targeted the Saudi Defence Ministry headquarters in Riyadh, King Fahd International Airport in Dammam, an Aramco site in Yanbu, and Abha International Airport in the past 48 hours. Meanwhile, developments in Libya, another OPEC member, are also influencing oil prices. Production at Libya's Al Zawiya refinery was halted after the closure of an oil pipeline valve connecting the refinery to the Hamada and Tahara oilfields.

The Libyan National Oil Corporation reported that people had entered the crude receiving station near the refinery and shut down the valve. Libya's crude has been a valuable resource for global markets as supply constraints persist due to the closure of the Strait of Hormuz. Many European nations import crude from Libya, with the country's production estimated at approximately 1.4 million barrels per day.