Oil Prices Surge on Gulf Storm and Yemen Conflict Fears
Oil prices climbed on Tuesday as two major threats to supply emerged: a fast-developing storm in the Gulf of Mexico and escalating conflict in Yemen. Brent crude futures rose 0.92% to $101.51 per barrel, while U.S. WTI crude gained 0.92% to $90.25 per barrel. The storm, which could become the first Atlantic hurricane of 2026, threatens to disrupt 15% of U.S. oil production and 5% of natural gas output, along with operations at six refineries.
Meanwhile, fighting between Saudi-backed Yemeni forces and the Houthis intensified, with attacks on Saudi airports. Analysts warn that supply disruptions from both the storm and the conflict could keep oil prices near $100 a barrel unless tensions ease significantly. Mukesh Sahdev of X Analytics noted that attacks and refinery shutdowns could maintain high refining margins and spread deficits to the crude oil market.
Despite these risks, oil supplies from the Middle East have been increasing. Saudi Energy Minister Prince Abdulaziz bin Salman reported that the East-West pipeline’s capacity had reached 5.8 million barrels a day. Vitol’s head stated that recent tanker shipments carried about 12 million barrels of crude and 2 million barrels of oil products daily from the region.
Geopolitical tensions also remain a factor, with U.S. President Donald Trump claiming that Iranian leaders had been killed in the U.S.-Israeli war, while Iran denied any leadership vacuum. The oil market continues to react to both supply risks and the volume of oil flowing from the Middle East.