Saudi Strikes Send Oil Prices Soaring as Middle East Tensions Escalate

The oil market has seen a significant surge in prices due to the escalation of conflict in the Middle East. Recent reports indicate that Yemeni ballistic missiles have struck Khamis Mushait and drones targeted Abha airport in Saudi Arabia, marking the first time the conflict has spilled into Saudi territory. This development comes on the heels of Iran's vow to strike Gulf energy infrastructure if its assets are attacked further.

The US and Iran traded strikes on oil tankers and warships over the weekend, leading to a significant increase in tensions. Brent crude prices rose by around 8% last week, while WTI nearly reached a 10% gain. The Hormuz shipping traffic has dropped to its lowest level since May, adding to concerns about global supply.

OPEC+ has kept its output policy unchanged for October, stating that new quotas still need to be agreed before further steps are taken. This decision leaves the market reactive to headline risk out of both the Red Sea and Gulf theatres.