Brent Crude Surges Past $126 as Middle East Tensions Escalate
Brent crude oil futures rose above $126 a barrel on Wednesday as tensions in the Middle East intensified, with attacks by Iran-backed Houthis on Saudi energy facilities threatening to disrupt crude shipments via the Red Sea.
The increase of over 2% took Brent prices past their highest point since July 24, and followed growing concerns about oil flows from the region. Hopes for a permanent resolution to the six-month-old US-Iran conflict have faded in recent days.
Attacks by the Houthis on Saudi energy facilities could threaten crude shipments via the Red Sea, which has been an alternative route to the crucial Strait of Hormuz since the start of the Iran war. The Houthi attacks have already severely curtailed crude flows through Hormuz, with volumes falling below 2 million bpd in recent weeks.
The International Energy Agency (IEA) had previously warned that global oil supply would fall by 4.3 million bpd this year due to the conflict, and non-OPEC producers have been ramping up output to meet demand.