Middle East Supply Risks Soar as Tensions Escalate

The Middle East supply situation has worsened significantly as tensions in the region escalate. The conflict, which initially centered on one shipping lane, has now spread to involve multiple vessels and ports. On Thursday, Iran attacked 10 ships near the Strait of Hormuz, while Washington struck five Iranian oil tankers.

The Houthis have also seized a Yemeni port on the Red Sea, adding to the region's production shut-ins, which jumped to 6.7 million barrels per day in August. OPEC output fell by 640,000 barrels per day during the same month.

Despite these developments, Chinese refiners have started buying oil again after a months-long absence from the market.