Oil Prices Rise as Supply Concerns Ease but Middle East Tensions Linger

Oil prices saw modest gains on Tuesday, October 6, as supply concerns eased slightly but persisted due to ongoing tensions in the Middle East. Brent crude futures rose by 20 cents to $100.54 per barrel, while US West Texas Intermediate crude futures climbed 12 cents to $89.50 per barrel. The price movements reflected a balancing act between easing supply worries and lingering risks from geopolitical conflicts.

The reduction in supply-side concerns came after the G7 countries agreed to release 100 million barrels of diesel and crude from emergency reserves. The group also committed to avoiding energy export restrictions, a move influenced by US President Donald Trump. However, the situation remains volatile due to attacks by Yemen’s Houthis on Saudi targets, including King Khalid International Airport in Riyadh and an Aramco refinery in Rabigh.

Analysts from JPMorgan noted the uncertainty surrounding the conflict’s outcome, highlighting that several economic thresholds assumed by the US administration had already been crossed without a clear exit strategy. Meanwhile, Goldman Sachs warned of potential oil price spikes to $120 per barrel if attacks on vessels in the Middle East escalate. The bank expects prices to return to around $80 per barrel if exports resume normal levels.

Daan Struyven, co-head of global commodities research at Goldman Sachs, emphasized that shipping risks had become a key driver of oil prices. He also predicted higher prices for natural gas and refined products, citing larger supply shocks in those markets compared to crude oil.