Oil Prices Crude rises as Saudi-Houthi conflict fuels supply concerns

Oil prices rose on Wednesday as traders weighed supply risks from fighting between Yemen’s Iran-aligned Houthis and Saudi Arabia against expectations that increased Russian diesel exports could ease market tightness.

Brent crude futures gained 89 cents, or 0.8%, to $106.58 a barrel by 0030 GMT. US West Texas Intermediate (WTI) crude futures rose 80 cents, or 0.9%, to $94.94 a barrel.

Brent fell 0.9% in the previous session, while WTI advanced 0.4%.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said concerns about the conflict between the Houthis and Saudi Arabia were pushing prices higher. However, expectations of increased Russian diesel exports could limit significant price movements.

Kikukawa forecast that WTI would trade between $90 and $100 a barrel.

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Saudi Arabia’s energy ministry said on Wednesday that the Houthis had attacked an administrative building belonging to state-owned oil company Saudi Aramco in Dhahran, causing a limited fire.

The Houthis have launched ballistic missiles and drones towards Saudi Arabia over the past week, saying their actions were in retaliation for the kingdom’s support for Yemeni government forces. Riyadh’s international airport has reportedly been struck four times, with an attack on Saturday killing 13 people.

The escalation has heightened concerns about the security of energy infrastructure and the potential for further disruption to regional oil supplies.

Meanwhile, Saudi Arabia increased oil production last month despite shipping disruptions linked to the US-Iran war. The move contributed to a sharp rise in production across OPEC+, the alliance of the Organization of the Petroleum Exporting Countries and other producers, including Russia, according to figures cited by OPEC on Tuesday.

Iran is also using new tactics to target ships in the Strait of Hormuz in an effort to keep oil prices high and influence US midterm elections, two senior Iranian officials told Reuters.

The strait is a critical route for global energy shipments, making any disruption there a major concern for oil markets.

In Russia, the government said on Tuesday that it saw no direct link between peace talks with Ukraine and a deal to export diesel to the United States.

The statement followed a Reuters report that US envoys had told Ukrainian officials the proposed deal was part of an effort to bring Russia back to negotiations aimed at reaching a peace settlement.

Traders are now monitoring developments in the Middle East, Russian fuel exports and diplomatic efforts involving Ukraine for signs of how they could affect energy supplies and prices.