Brent crude oil prices surged to a five-month high amid escalating tensions in the Middle East, raising concerns about potential disruptions to energy supplies. Brent crude futures increased by 0.7% to reach $113.96 per barrel, after hitting $114.72, the highest level since May 4. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 1.1% to $100.57 per barrel.
The rise in oil prices follows intensified market worries after reports emerged that Saudi Aramco ordered the evacuation of its headquarters in Dhahran. This move was attributed to the escalating conflict between Saudi Arabia and Yemen-based Houthi forces, which has heightened fears of potential disruptions to oil shipments from the region.
Analysts have cautioned that further attacks could exacerbate supply shortages, as uncertain shipping routes and elevated freight costs continue to exert pressure on the global energy market. Particular attention has been drawn to the security of the Bab el-Mandeb Strait, a crucial shipping route connecting the Red Sea with the Gulf of Aden, which, if disrupted for an extended period, could delay energy deliveries and sustain high oil prices.
Compounding the supply concerns, Libya has faced setbacks with the shutdown of a pipeline valve that connects the Hamada and Tahara oilfields to the Zawiya port, leading to reduced production at both fields.
In another development, a Malta-flagged tanker carrying 40,000 metric tons of Russian diesel is en route to New York. This follows Russia’s agreement to resume diesel exports to international markets, including the United States, in a bid to alleviate fuel-price pressures.
Oil markets are expected to remain responsive to developments in the Middle East, the impact of potential shipping disruptions, and the time required to restore affected energy operations.