Global oil prices surged as escalating tensions in the Middle East raised fears of potential disruptions to energy supplies. Brent crude reached a five-month high, climbing 0.7% to $113.96 per barrel, after peaking at $114.72. This marks the highest level since May 4. Meanwhile, US West Texas Intermediate (WTI) crude saw an increase of 1.1%, reaching $100.57 per barrel.
The spike in oil prices comes amid heightened market anxiety over the conflict involving Saudi Arabia and Yemen-based Houthi forces. Reports of Saudi Aramco evacuating its headquarters in Dhahran added to concerns, as analysts cautioned that further attacks could impede oil shipments and exacerbate existing supply shortages. The uncertainty surrounding shipping routes and fluctuating oil flows, along with rising freight costs, continue to pressure the global energy market.
Moreover, the security of the Bab el-Mandeb Strait, a crucial shipping passage connecting the Red Sea to the Gulf of Aden, is under scrutiny. Any prolonged disruptions in this strategic area could delay energy deliveries, sustaining elevated oil prices. Additional challenges emerged in Libya, where the closure of a pipeline valve connecting the Hamada and Tahara oilfields to Zawiya port led to reduced production at both sites.
In a bid to alleviate fuel-price pressures, a Malta-flagged tanker carrying 40,000 metric tons of Russian diesel is en route to New York. Russia has agreed to resume diesel exports to international markets, including the United States.
The oil market remains volatile, with its trajectory largely dependent on developments in the Middle East, the extent of shipping disruptions, and the time needed to restore affected energy operations.