Oil prices climb as storms and Middle East tensions threaten supply
Oil prices climbed on Wednesday as concerns over supply disruptions weighed heavily on the market. A storm heading toward US oil-producing regions and attacks by Yemen's Iran-backed Houthis on Saudi Arabia's airports contributed to the upward pressure on prices. Brent futures gained 93 cents, or 0.92%, to $101.51 a barrel, while US West Texas Intermediate (WTI) crude rose 82 cents, or 0.92%, to $90.25.
Forecasters warned that the storm in the Gulf of Mexico could become the first Atlantic hurricane of 2026 within two days, potentially impacting oil and gas facilities. The affected offshore areas produce 15% of US crude oil and 5% of the country's natural gas. Tim Waterer, chief analyst at KCM Trade, noted that the storm adds to existing supply-side challenges, raising fears of production and refining disruptions.
Meanwhile, Saudi-backed Yemeni government forces launched a major offensive against the Houthis, escalating tensions in the region. Attacks on Saudi airports in Jazan and Najran highlighted the risks to Middle East crude supplies. Mukesh Sahdev, chief oil analyst at X Analysts, predicted that prices would remain elevated near $100 without a significant de-escalation in the conflict.
US-Iran relations remained strained, with former US President Donald Trump questioning the leadership in Iran amid the ongoing war. Iran's foreign ministry spokesman, however, asserted that Washington is well aware of Iran's decision-making system.