Middle East Tensions Drive Oil Prices Over $100 Amid Houthi Attacks

Oil prices surged past $100 a barrel on Wednesday as tensions in the Middle East intensified, particularly around the Strait of Hormuz. The Saudi-led coalition reported intercepting a Houthi missile aimed at southwestern Saudi Arabia, while the Houthis claimed responsibility for attacks on Riyadh's airport and an Aramco refinery. These developments heightened concerns over energy supply disruptions, reversing earlier relief from improving export flows. The UK Maritime Trade Operations noted nine attacks on tankers this month alone, underscoring the volatility in the region.

The escalation in Yemen added another layer of uncertainty to the global energy market. While the Yemeni government claimed gains against the Houthis, the group maintained control over key territories and continued targeting Saudi infrastructure. The conflict's spillover effects were evident as Pakistan and Turkey pledged troop deployments to support Saudi Arabia, raising concerns about broader regional tensions.

In financial markets, Asian stocks retreated amid the geopolitical risks, while oil prices extended gains. Brent crude rose 0.9% to $101.48 per barrel, and West Texas Intermediate climbed 1.0% to $90.29. The dollar strengthened against the yen, euro, and pound, reflecting investor caution. Despite record highs on Wall Street driven by AI-related stocks, Asian markets saw declines, with Tokyo and Hong Kong leading the drop.

Analysts warned that global oil stockpiles are running low, limiting governments' ability to absorb prolonged supply disruptions. The market remains highly sensitive to geopolitical risks, with any sustained disruption in the Strait of Hormuz posing a significant threat to energy markets. Meanwhile, the Yemen conflict continues to escalate, further complicating the regional security landscape.