Oil prices reached a five-month high following reports that Saudi Arabian-led forces destroyed ballistic missiles targeting the kingdom’s energy hubs. Brent crude settled 3.7% higher at $109.86 a barrel after earlier hitting $110 for the first time since May, while US West Texas Intermediate rose 3.5% to $101.41 a barrel. The surge comes amid ongoing anxiety over high fuel costs linked to Donald Trump’s Iran war, launched in February, and just weeks before the US midterm elections.
Analysts warn a deepening Middle East crisis is looming over oil markets, with increased Iranian attacks on ships in the Strait of Hormuz and escalating Houthi rebel strikes against Saudi Arabia, including a missile strike on Saudi Aramco’s headquarters. Helima Croft, global head of commodity strategy at RBC Capital Markets, said the ongoing Houthi attacks prove the region is far from normal and that recent oil export rises were not a sign of de-escalation. She added that no energy facility appears secure, raising questions about whether Washington must become more involved.
Trump has sought to ease political fallout by exploring fuel imports from Russia and potentially easing sanctions on 'dark fleet' vessels, as voters express anxiety over inflation. Protests over high fuel costs have emerged in Europe, Asia, and Latin America. The Riyadh-led coalition intercepted a ballistic missile aimed at Yanbu, a key oil refining and petrochemical centre, and destroyed two cruise missiles and three drones.
Schreiner Parker of Rystad Energy noted Yanbu’s strategic importance due to increased reliance on the East-West pipeline amid tanker threats in the Strait of Hormuz.
Source: Financial Times Companies · Summarized by HeadlinesBriefing