Oil Prices Soar on Renewed Middle East Tensions

The Middle East tensions have reignited oil prices, which rose by over 4% in early morning trading. This increase comes after the US intercepted a surprise attack on its troops and Saudi Arabia intercepted drones from Iranian-backed groups targeting Saudi energy infrastructure.

The risk of more prolonged supply disruptions grows as Saudi oil infrastructure is increasingly targeted. The Jazan refinery, which has a production capacity of 400k b/d, has reportedly shut down following Houthi attacks over the weekend.

Tanker traffic through the Strait of Hormuz remains halted, with Iran rejecting Oman's proposal for a 50-50 shipping plan. This development is expected to further tighten the refined products market already dealing with disruptions from the Persian Gulf and Russia.