Oil Prices Surge to Five-Month High Amid Middle East Tensions
Brent crude reached its highest level since early May, driven by Houthi attacks in Saudi Arabia and an oil spill off the UAE coast.
Oil prices climbed on Friday, with Brent crude futures reaching their highest point since early May, following Houthi attacks in Saudi Arabia that heightened concerns over energy supply disruptions in the Middle East. An oil spill off the coast of the United Arab Emirates further contributed to market anxieties.
Brent crude futures gained $1.71, or 1.5%, to settle at $114.99 a barrel, after earlier touching $115.16, the highest level recorded since May 4. US West Texas Intermediate crude saw a rise of $1.80, or 1.8%, to $101.27.
The Brent benchmark is on track for its third consecutive weekly increase, an accumulation of 4.4%, while WTI is set to conclude the week with a 0.4% decrease.
Saudi Aramco, the world's largest crude exporter, reportedly ordered the evacuation of its headquarters in Dhahran on Thursday as fighting intensified with Yemen-based Houthis. This development has raised market concerns about potential escalations and subsequent supply disruptions.
In the UAE, authorities reported an oil spill off the coast of Umm Al Quwain on Friday. The Ministry of Climate Change and Environment confirmed the spill but did not specify its cause or identify the involved tanker. Shipping sources previously indicated that the tanker Gem No. 2 was struck by an unidentified projectile on October 9.
"The market remains concerned about a potential escalation, which, in a worst-case scenario, could trigger renewed supply disruptions," noted UBS analyst Giovanni Staunovo. He added that volatile oil flows and elevated freight rates have contributed to an undersupplied market.
Recent clashes between the Houthis and a Saudi-led coalition backing Yemen's internationally recognized government have intensified, particularly near the Bab el-Mandeb, a crucial shipping lane at the entrance to the Red Sea.
Meanwhile, in Libya, a shutdown of an oil pipeline valve has led to reduced production at the Hamada and Tahara oilfields, according to the head of the National Oil Corporation. Separately, the first Russian diesel shipment bound for the U.S. since an export agreement between Moscow and former President Donald Trump was reported to be en route to New York.