Saudi Energy Facilities Attacked, Oil Prices Surge to Six-Week High
Oil prices surged to a six-week high after Iran-backed Houthis in Yemen attacked Saudi energy facilities, setting oil installations ablaze and escalating the six-month-old Middle East conflict.
The attacks on four cities in southern Saudi Arabia wounded over 70 people and threatened to worsen the war's global economic impact by disrupting Middle East energy supplies beyond the blockaded Strait of Hormuz.
Saudi Arabia, the world's second-largest crude producer behind the US, has been circumventing the strait by shipping oil west to the Red Sea. However, the attacks on Saudi Arabia appear to be among the biggest carried out against that nation and may worsen the war's global economic impact.
Tim Waterer, chief market analyst at KCM Trade, said 'The price action reflects both genuine physical tightness, tanker flows through Hormuz remain well below normal, and a clear geopolitical risk premium. Right now the risk premium is doing a lot of the heavy lifting.'