Oil prices rise to to $106.58 a barrel (AI-generated image)
Oil prices rose on Wednesday as traders weighed the risk of supply disruptions from escalating attacks by Yemen’s Iran-aligned Houthi rebels on Saudi Arabia against expectations of increased Russian diesel exports easing market tightness.Brent crude futures rose 89 cents, or 0.8%, to $106.58 a barrel by 0030 GMT, while US West Texas Intermediate crude futures gained 80 cents, or 0.9%, to $94.94. Brent had fallen 0.9% on Tuesday, while WTI gained 0.4%.“Supply concern stemming from conflict between the Houthis and Saudi Arabia is driving prices higher,” Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, told Reuters. He said expectations of increased Russian diesel exports could limit sharp price movements in either direction.Saudi Arabia’s energy ministry said the Houthis attacked an administrative building belonging to state-owned oil company Saudi Aramco in Dhahran, causing a limited fire. The group has launched ballistic missiles and drones at the kingdom over the past week in retaliation for Riyadh’s support for Yemeni government forces.US president Donald Trump accused the Houthis of deliberately trying to drive up oil prices ahead of the US midterm elections.
In a post on Truth Social on Tuesday, he said the group had re-emerged, probably at Iran’s behest, and warned that he would not forget the attacks after the elections.Trump also threatened to step up US military action in the Middle East after the November elections, which will determine whether Republicans retain their majorities in the House of Representatives and Senate.Meanwhile, Saudi Arabia increased oil production last month despite disruptions to shipments caused by the US-Iran war, contributing to a sharp rise in output from OPEC+, the oil producers’ alliance, according to data cited by Reuters.Iran is also deploying new tactics to target ships in the Strait of Hormuz in an effort to keep oil prices high and influence the US midterm elections, two senior Iranian officials told Reuters.In a potential counterweight to supply concerns, Russia said on Tuesday it saw no direct link between peace talks with Ukraine and its deal to export diesel to the US. The statement followed a report that US envoys had told Ukrainian officials the deal was part of an effort to bring Moscow back to negotiations.Analysts expect the competing pressures from regional conflict and potential increases in fuel supply to shape oil price movements in the coming days.