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Oil prices rose sharply on Thursday, reaching a one-week high as fears of supply disruptions were reignited by missile strikes from the Houthi movement targeting Saudi Arabia's Red Sea export route. Brent crude settled at approximately $106.50 per barrel, marking a 3.5% increase, while West Texas Intermediate (WTI) finished around $94.50, up nearly 2.5% and breaking a six-session losing streak that saw prices drop by about 13%.
The Houthi attacks included six ballistic missiles aimed at the Taif area and the Yanbu export hub, with the group claiming to have also targeted facilities belonging to Saudi Aramco. This escalation has raised concerns about the security of oil supplies, particularly as Saudi Arabia has been increasing crude volumes through its East-West Pipeline to Yanbu, although tanker loadings have not yet resumed.
Despite the surge in oil prices, gains were tempered by reports of ongoing negotiations between the United States and Iran regarding a phased deal to reopen the Strait of Hormuz, a critical waterway for global oil shipments. Both nations are reportedly reluctant to concede leverage in the talks, which could potentially ease tensions and impact oil prices significantly. Meanwhile, record diesel prices and discussions in the U.S. about limiting diesel exports continue to exert pressure on refining margins, complicating the overall market dynamics.
Source: KLEA News