Middle East tensions push crude towards $100

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Global oil prices rose towards $100 per barrel on Tuesday as renewed fighting in the Middle East heightened fears of further disruptions to crude oil supplies.

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The increase followed attacks by Yemen’s Iran-backed Houthi group on four cities in southern Saudi Arabia, including targets linked to the country’s state-owned oil company.

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The attacks, which also reportedly affected energy infrastructure, came amid an escalation in the wider conflict involving Iran, the United States and Israel.

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Brent crude climbed to $99.46 per barrel on Tuesday, its highest level since July 24, before easing to $97 later in the evening.

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United States West Texas Intermediate crude also rose to its highest level since June 8, reflecting growing concerns among traders about the impact of the conflict on global energy supplies.

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The Houthis said they had launched a broad operation deep inside Saudi territory, using drones and missiles to attack targets in Khamis Mushait, Abha, Najran and Jazan.

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Jazan, a major Red Sea port city, is home to a large refinery and power plant, while other locations targeted in the attacks have oil distribution facilities.

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According to Reuters, satellite images showed a thick cloud of black smoke over the Jazan refinery and a column of white smoke rising from an oil distribution centre in Abha.

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Saudi authorities reported fires at the sites and said 73 people were injured in the attacks, including women and children.

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The attacks represent a significant escalation after a period of relative calm in August and have raised fresh concerns about the security of oil infrastructure and shipping routes across the Middle East.

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The Houthis control much of Yemen’s populated areas and have previously threatened shipping around the Red Sea. Saudi Arabia has also led an Arab coalition fighting the group in Yemen for more than a decade.

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The renewed hostilities come as fighting between the United States and Iran has intensified, with both sides exchanging fire and seeking to exert pressure on each other through restrictions on energy and shipping.

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The Strait of Hormuz has become a major flashpoint in the conflict because of its importance to global oil supplies. The strategic waterway has previously carried about a fifth of global oil, making any prolonged disruption a major concern for consuming nations and energy markets.

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Washington has been seeking to increase the flow of crude into international markets by guiding ships through the Strait of Hormuz, while simultaneously using a blockade to restrict Iranian oil exports.

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Iran, however, has announced plans to establish what it described as a “maritime exclusion zone” extending from the perimeter of the US blockade through the Strait of Hormuz and into the Gulf.

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The ongoing conflict has already contributed to shortages of crude oil and refined petroleum products in some markets.

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In the United States, the average retail price of diesel has risen to more than $5.90 per gallon, according to the Reuters report. US President Donald Trump, however, said oil prices would fall sharply if the United States won the war with Iran.

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“Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran. Three Dollars a gallon, but ultimately, below Two Dollars a gallon. It will all happen quickly, and Iran will never have a Nuclear Weapon,” Trump said on social media.

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The latest attacks have increased uncertainty in the oil market, with traders closely monitoring developments around Saudi Arabia, Iran and the Strait of Hormuz for signs of further disruptions to global crude supplies. This may trigger a rise in fuel prices in Nigeria.

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