Oil Prices Jump $2 Following Houthi Strikes in Saudi Arabia
Oil prices increased by more than $2 a barrel on Thursday following additional Houthi attacks in Saudi Arabia, which heightened worries about a potential escalation of conflict and further disruptions to crude supplies from this critical exporting region. Brent crude futures increased by $2.82, representing a rise of 2.59 percent, reaching $111.64 per barrel at 0626, approaching a five-month peak. US West Texas Intermediate crude increased by $2.24, representing a rise of 2.31 percent, reaching a price of $99.39. “Oil prices remain well bid, with ICE Brent back above $110 per barrel this morning following additional deadly attacks on Saudi Arabia,” analysts said in a note on Thursday. The US State Department intends to evacuate family members from several additional US missions in the region, according to information provided by US officials.
On Wednesday, Yemen’s Iran-aligned Houthis targeted multiple locations, resulting in at least one fatality and eight injuries at a civilian airport in Dammam, alongside two deaths from a drone assault on a Saudi oil field. Explosions were reported in Sirik, located in southern Iran, according to Iranian media on Wednesday. The specifics regarding the nature and origin of these explosions remain unclear. On Thursday, Iran’s Islamic Revolutionary Guard Corps Navy reported that four vessels engaged in illicit oil transfers in the northern Persian Gulf were simultaneously struck and ignited after being monitored by its forces the previous day. The IRGC indicated that three additional vessels encountered mines to the west of the Strait of Hormuz, cautioning the US military that ongoing provocations might result in a broader response targeting its regional bases. Supply disruptions persisted, exerting pressure on global inventories.
US crude stocks decreased by 3.06 million barrels to 412.5 million barrels last week, according to the US Energy Information Administration’s report on Wednesday. This figure contrasts with analysts’ expectations from a poll, which anticipated an 820,000-barrel draw. Distillate stockpiles, encompassing diesel and heating oil, increased by 1.68 million barrels in the week, reaching a total of 104.3 million barrels. This contrasts with forecasts that anticipated a decline of 1.16 million barrels, according to EIA data. The Trump administration is proposing to lend up to nearly a third of the 1-million-barrel US emergency heating oil reserve, as stated by the Department of Energy on Wednesday. This move aims to mitigate the price increases that have arisen from diesel shortages linked to the conflicts in Iran and Ukraine.
Meanwhile, Russian President Vladimir Putin hosted US Special Envoy Steve Witkoff in St Petersburg on Wednesday for discussions aimed at concluding the war in Ukraine, coinciding with Washington’s recent efforts to halt Europe’s most severe conflict since World War Two. The Kremlin announced that Putin has consented to recommence US-mediated peace negotiations with Ukraine as early as next month. Ukrainian President Volodymyr Zelenskiy expressed his endorsement of the negotiations and conveyed his aspiration for them to commence at the earliest opportunity.
