Oil prices surged on Friday, with Brent crude reaching its highest level since early May after attacks by the Houthis in Saudi Arabia raised concerns about potential supply disruptions in the Middle East. Brent crude futures climbed $1.71, or 1.5%, to $114.99 a barrel, while US West Texas Intermediate crude rose $1.80, or 1.8%, to $101.27. The Brent benchmark is on track for a 4.4% weekly gain, marking its third consecutive week of increases, while WTI is set to finish 0.4% down on the week.
The market's anxiety was fueled by Saudi Aramco's evacuation of its headquarters in Dhahran on Thursday amid escalating clashes between Saudi Arabia and the Yemen-based Houthis. Additionally, the UAE reported an oil spill off the coast of Umm Al Quwain, though the cause and the tanker involved remain unidentified. Shipping sources earlier reported that the Gem No.2 tanker was struck by an unidentified projectile off the UAE coast.
Analysts warn of potential escalation, which could lead to renewed supply disruptions. UBS analyst Giovanni Staunovo noted that volatile oil flows and elevated freight rates have left the market undersupplied. Meanwhile, clashes between the Houthis and a Saudi-led coalition have intensified near the Bab el-Mandeb shipping chokepoint in the Red Sea.
In Libya, production at the Hamada and Tahara oilfields has been reduced due to the shutdown of a pipeline valve leading to Zawiya port. Separately, the first Russian diesel shipment to the US since an export agreement between Moscow and US President Donald Trump is en route to New York, according to ship-tracking data.