Oil Prices Climb Above $90 Amid Middle East Tensions and Houthi Strikes
Oil prices rebounded on Wednesday, recovering from five-week lows as escalating tensions in the Middle East heightened concerns over potential supply disruptions. Brent crude futures rose 0.90% to $101 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 0.87% to $90.20 a barrel by 9:41 a.m. IST. The gains followed heightened fighting between Iran-backed Houthi forces and Yemen’s Saudi-backed government, which sparked fears of disrupted energy supplies.
The Houthis claimed to have targeted a major Saudi refinery, adding to market anxiety. Tensions around the Strait of Hormuz have intensified, with Iran increasing attacks on oil tankers and other vessels in the strategic waterway. The UK Maritime Trade Operations (UKMTO) reported multiple incidents this month, underscoring the risks to one of the world’s most critical oil transit routes.
Despite the escalation, oil prices remained lower for the week due to indications of recovering crude flows from the Persian Gulf. Tankers continued to pass through the Strait of Hormuz, and Saudi Arabia restored its East-West oil pipeline to a pumping capacity of 5.8 million barrels per day. The improving flow of supplies eased some concerns about prolonged disruptions to global crude markets.
Analysts noted that the oil market is caught between improving physical supply flows and the growing threat of disruptions around key Middle Eastern shipping routes. Meanwhile, Saudi-backed Yemeni government forces retaken several key positions along the Red Sea from the Houthis, which could eventually support higher crude flows through the Bab el-Mandeb Strait. The Houthis responded by targeting key sites in Saudi Arabia, including an Aramco refinery in Riyadh.
In the United States, industry data showed crude inventories fell by 2.1 million barrels last week. Planned emergency oil releases by the Group of Seven also limited gains in crude prices, as markets balanced the prospect of additional supplies against escalating geopolitical risks.