Oil Prices Soar Amid Escalating Middle East Tensions

Oil prices surged to a six-week high on Tuesday after Houthi rebels in Yemen attacked Saudi energy facilities, sparking concerns of escalating Middle East tensions and global economic repercussions.

The attacks set oil installations ablaze and wounded over 70 people, with Brent futures rising by 92 cents, or 0.9%, to settle at $97.92 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.55, or 1.7%, to settle at $93.03.

The Houthi-controlled media reported that Saudi warplanes had carried out airstrikes in Yemen's Jubah district and Taiz province, further escalating the conflict.

Saudi Arabia, the world's second-largest crude producer behind the U.S., has been circumventing the Strait of Hormuz by shipping oil west to the Red Sea. However, Tuesday's attacks appear to be among the largest carried out against Saudi Arabia, threatening to worsen the war's global economic impact.

Goldman Sachs and HSBC have raised their crude price forecasts for 2026 and 2027 in response to the increasing tensions and disruptions in Middle East shipping. The number of commodity vessels sailing through the Strait of Hormuz has decreased from eight to seven, while global fuel prices remain high due to refinery disruptions and peak winter demand.