Oil prices rose to a five month high on Thursday as Houthi attacks in Saudi Arabia and continued strikes on shipping kept supply fears alive, with Brent crude closing up 4% at $113.17 a barrel.
Brent rose $4.35 to settle at its highest close since May 4. U.S. West Texas Intermediate gained $2.14, or 2.2%, to near $99.29 in afternoon trading.
Why oil prices rise on Saudi attacks
The Houthis struck several targets in Saudi Arabia on Wednesday, according to reports. At least one person was killed and eight wounded at a civilian airport in Dammam, and two people died in a drone attack on a Saudi oil field.
The United States ordered some diplomats and family members to leave its missions in the kingdom, and Saudi Aramco told staff to leave its Dhahran headquarters, according to reports. A pipeline closure also cut Libyan output.
Shipping adds to the risk. Kpler data showed at least 18 attacks on vessels over the past two weeks, and LSEG analysts warned that Iran was targeting tankers well beyond the Strait of Hormuz, reaching into the Gulf of Oman.
Exports are up, but risks are higher
Morgan Stanley estimated Middle East crude exports at about 17 million barrels a day last week, above pre war levels by some reports. PVM Oil analyst Tamas Varga said that was “more than countered” by attacks on ships and Saudi oil infrastructure.
Brent had traded near $104 a week earlier, so it has gained about $9 since, or roughly 8%.
What could change the picture
Goldman Sachs raised its December Brent forecast to $90 a barrel this month, well below current prices, and the International Energy Agency expects world oil demand to fall by about 2.6 million barrels a day in 2026 as high prices and war disruption weigh on consumption.
The Trump administration is offering to loan up to nearly a third of the 1 million barrel U.S. emergency heating oil reserve, the Department of Energy said, as prices surge on diesel shortages linked to the wars in Iran and Ukraine.
The Houthis claimed an Oct. 10 strike on Riyadh’s international airport that, according to reports, killed 13 people and wounded more than 300.
Eurasia Group analysts predicted in March that payoffs from Saudi Arabia would likely stop the Houthis from major attacks on its oil infrastructure, an assumption recent strikes have tested.
Higher crude lifts revenue for exporters such as Nigeria, but it also raises import and pump costs, and the diesel price cuts Dangote made earlier this month could be harder to repeat.
Brent has moved on headlines for weeks. A diesel deal with Russia, a reserve release and Gulf exports pulled prices down earlier this month, while every new strike on Saudi Arabia or on a ship pushed them back up.
Prices above $110 reflect risk as much as shortage. Until the attacks stop and the Strait of Hormuz reopens, that risk is likely to stay priced into every barrel, whatever forecasters say about where prices go next year.
