Oil prices retreated on Tuesday, October 13, ending a three-day rally as concerns grew over supply disruptions due to escalating conflict in West Asia. Brent crude dipped below $106 a barrel after rising over 6% in the previous three sessions, peaking above $107 before settling at $105.87. The US West Texas Intermediate (WTI) crude hovered near $93, while diesel prices in New York fell for the third consecutive day following Russia's agreement to increase supply at the request of US President Donald Trump.
The decline came amid heightened tensions in the region, particularly after Iran-backed Houthi militants attacked Riyadh's main airport, killing 16 people, including a US citizen, and injuring around 300. The strikes have escalated pressure on Washington to intervene more aggressively in the Yemen conflict, with Trump hinting at potential military action against the Houthis.
Shipping risks in the Gulf region have also intensified, with reports of strikes on tankers in the Strait of Hormuz and supertankers avoiding the Arabian Gulf. Oil prices have surged over 70% this year as the US conflict with Iran has unsettled global energy markets.
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman announced that Saudi Aramco could boost export capacity by 1.2 million barrels a day within two months by repurposing existing gas pipelines. He also revealed plans to expand a pipeline bypassing the Strait of Hormuz by 40% to 10 million barrels a day within two to three years.
Meanwhile, tensions persisted in Europe as Trump accused both Kyiv and Moscow of violating his 'energy ceasefire.' Ukrainian President Volodymyr Zelenskyy asserted that Ukraine would continue targeting Russia's energy infrastructure due to ongoing threats to its own.