Storm and Middle East Tensions Drive Oil Prices Higher
Oil prices climbed on Wednesday as concerns over supply disruptions grew. A storm heading for US oil-producing regions in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 within two days. The affected areas produce 15% of US crude oil and 5% of natural gas, raising fears of production and refining disruptions.
The storm could impact six refineries, which account for about 50% of the national refining capacity of 18.2 million barrels per day. Meanwhile, US crude oil and gasoline inventories fell last week, while distillate stocks saw a slight increase. Supply had been rising due to the East-West pipeline reaching 5.8 million barrels a day, according to Saudi Energy Minister Prince Abdulaziz bin Salman.
In the Middle East, attacks by Yemen’s Iran-backed Houthis on Saudi Arabia’s airports in Jazan and Najran escalated tensions. Saudi-backed Yemeni forces launched a major offensive to retake territory from the Houthis, with Riyadh increasing airstrikes in support. Analysts suggest these disruptions will keep oil prices elevated near the $100 level without significant de-escalation.
US-Iran relations remain strained, with US President Donald Trump stating uncertainty over Iran’s leadership during the ongoing conflict. Iran’s foreign ministry spokesman countered that Washington is well aware of Iran’s decision-making system.