Crude prices climbed on Tuesday amid a fresh wave of violence across the Gulf, which fueled worries about energy supplies and maintained a geopolitical risk premium in the market. Brent crude hovered close to a five-month peak above USD 110 per barrel as market participants evaluated Houthi assertions regarding strikes on Saudi installations alongside news of assaults on commercial ships.
Brent futures gained 55 cents, representing a 0.50% increase, to reach USD 110.10 a barrel by 0319 GMT. The global benchmark hit USD 110.70 during Monday’s session, marking its strongest performance since May 20. U.S. West Texas Intermediate crude also posted gains, though the two primary contracts carried differing price tags.
Houthi Claims Keep Saudi Energy Sites in Focus
On Monday, Yemen’s Iran-aligned Houthi movement asserted that it had targeted Saudi energy installations, military sites, and airports. Among the locations cited were an Aramco facility located in Yanbu and the Shaybah oilfield.
Additionally, the faction pointed to Abha airport and King Khalid International Airport in Riyadh as targets. Saudi officials did not issue an immediate confirmation of these claims, and independent verification was absent, with no verified reports of structural damage at the named locations.
Separately, a Houthi strike targeting a government security forces training facility in Yemen’s Shabwa province resulted in 58 deaths. The incident also left over 200 people wounded, according to the report.
These violent events heightened anxieties regarding regional security and the protection of energy infrastructure. For market participants, the primary concern continued to be potential bottlenecks in production, shipping, and transport.
Gulf Vessel Reports Sustain Supply Concerns
According to maritime data firm Kpler on Monday, tracking data pointed to strikes on a minimum of 18 vessels over a span of two weeks. These events kept the spotlight on the safety of commercial shipping lanes in the area. The documented incidents involved vessels navigating through a zone experiencing escalating tensions across key energy corridors.
Analysts at ING noted that crude prices continued to sustain a significant risk premium due to ongoing market volatility. They mentioned that a steady continuation of oil flows might gradually erode this premium, though they observed no indicators of such a trend yet. Their outlook tied future price trajectories directly to the uninterrupted transit of oil through the region.
Can oil shipments continue without disruption as attacks spread across the region? The answer matters for traders assessing whether current prices reflect a lasting supply threat or a temporary rise in risk.
In US trading, the front-month November WTI contract rose 0.24% to settle at USD 103.91 ahead of its Tuesday expiration. Meanwhile, the more heavily traded December contract moved up by 39 cents, or 0.40%, to reach USD 98.93.
This pricing spread highlighted the divergence between prompt and deferred deliveries. In a separate development, a preliminary survey released Monday anticipated decreases in U.S. crude and refined product inventories for the prior week, though the poll omitted specific projections regarding the magnitude of the drawdowns.
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Russian Oil Policy Adds Another Market Variable
Alongside developments in the Gulf, market participants evaluated shifts in U.S. restrictions impacting Russian energy sectors. On Friday, President Donald Trump signed an executive order lifting specific Russia-related tariffs and sanctions, which included penalties associated with energy procurement. This policy shift sparked questions regarding the trajectory of Russian energy commerce.
However, by Saturday, Trump said that a definitive choice on the matter had not yet been finalized. Secretary of State Marco Rubio similarly indicated that administration officials sought additional time to review the situation.
Data from the International Energy Agency showed that Russian crude production grew by 65,000 barrels per day during September, bringing output to 8.43 million barrels per day. Despite this month-over-month increase, production remained roughly 870,000 barrels per day lower than figures recorded a year prior.
Tim Waterer, chief analyst at KCM Trade, suggested that an influx of Russian diesel could provide some market relief. Even so, he emphasized that traders remained far more preoccupied with the threat of further damage to Gulf energy infrastructure.
Conclusion
Oil prices rose as Houthi claims against Saudi infrastructure and reported vessel attacks increased concern over Gulf energy supply. Brent crude held near a five-month high, while traders tracked US inventory expectations and uncertainty over Russian sanctions. Continued shipping flows remain central to whether the risk premium eases.
