Storm and Houthi Attacks Drive Oil Prices Higher
Oil prices climbed on Wednesday as global markets weighed potential supply disruptions from both natural and geopolitical threats. A storm forming in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 within two days, threatening oil and gas production facilities. The affected offshore areas contribute 15% of US crude oil and 5% of natural gas output. Analyst Tim Waterer from KCM Trade noted the storm as an unwelcome complication, raising concerns about production and refining disruptions at a time when the market already faces supply challenges.
Meanwhile, tensions in the Middle East escalated as Yemen’s Houthis targeted Saudi Arabian airports in Jazan and Najran. The attacks coincide with Saudi-backed Yemeni government forces launching a major offensive against the Houthis, supported by increased airstrikes from Riyadh. Analyst Mukesh Sahdev from X Analysts in Sydney suggested that these hostilities and refinery outages will likely keep oil prices elevated near the $100 mark without significant de-escalation.
Despite rising supply from the East-West pipeline, which reached 5.8 million barrels a day, the market remains volatile. US crude oil and gasoline inventories fell last week, while distillate stocks saw a slight increase. The International Energy Agency (IEA) is set to decide on details of a diesel stocks release next week, adding another layer of uncertainty to the market.
Geopolitical tensions between the US and Iran also contributed to market jitters. Former US President Donald Trump commented on the unclear leadership situation in Iran during the ongoing US-Israeli war, stating that nobody knows who is currently running the country. Iran’s foreign ministry spokesman responded by asserting that Washington is well aware of Iran’s decision-making system.