Oil prices increased on Friday as Houthi attacks in Saudi Arabia raised concerns about possible disruptions to Middle Eastern energy supplies.
Brent crude futures rose by 58 cents, or 0.5%, to $113.75 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude increased by 66 cents, or 0.7%, to $100.13 per barrel.
The gains followed growing concerns about regional security and the potential impact on global oil shipments. Market participants are closely monitoring developments across the Middle East.
Brent Crude and WTI Show Different Weekly Trends
Brent crude settled at its highest level since May 4 on Thursday. It is also heading towards its third consecutive weekly gain.
However, US WTI crude is on track to record a weekly decline. This would follow two consecutive weeks of gains for the American benchmark.
The different trends reflect changing market conditions and concerns about crude oil supply. Traders continue to assess how regional tensions could affect production and transportation.
Houthi Attacks Raise Concerns Over Oil Supplies
Saudi Aramco ordered the evacuation of its headquarters in Dhahran on Thursday, according to Reuters. The city is located near the Gulf and Bahrain.
The reported evacuation came as fighting intensified between Saudi Arabia and Yemen-based Houthi forces. Saudi Arabia is the world’s largest crude oil exporter.
Analysts at ING said markets were increasingly concerned about renewed escalation in the Persian Gulf. They warned that further tensions could threaten oil flows that have remained relatively resilient.
The analysts also noted that geopolitical uncertainty could keep oil prices elevated. Even without further escalation, the possibility of supply disruptions may continue to influence market prices.
Red Sea Shipping Route Remains a Concern
The conflict involves the Houthis and a Saudi-led coalition supporting Yemen’s internationally recognised government. Fighting has intensified as the Iran-aligned Houthis have moved towards Bab el-Mandeb.
The strategic shipping chokepoint connects the Red Sea with the Gulf of Aden. Disruptions in this area could affect commercial shipping and energy transportation.
Analyst Linh Tran of XS.com said the extent of actual disruption remains important. The time required to restore operations will also influence the market’s assessment of supply risks.
If attacks continue and delay oil deliveries, higher prices could receive further support. However, the impact will depend on the scale and duration of disruptions.
Libya Pipeline Shutdown Adds to Supply Concerns
Supply concerns have also emerged in Libya. A pipeline valve serving the Hamada and Tahara oilfields has been shut.
The pipeline connects the oilfields to Zawiya port. According to the head of Libya’s National Oil Corporation, the shutdown has reduced production at both fields.
The developments have added another factor for oil markets to monitor. Traders will continue watching regional conflicts, production changes and shipping conditions.
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Overall, oil prices remain sensitive to geopolitical developments and potential supply interruptions. Further changes in regional security could influence crude benchmarks in the coming sessions.
