On 16/10, Brent oil prices closed up 3.7% at 109.8 USD per barrel, after briefly touching 110 USD, its highest level since May. US crude WTI also rose 3.5% to 101 USD. For the entire week, WTI gained over 10%, while Brent increased by nearly 5%.
The surge in oil prices was primarily driven by escalating tensions and attacks across the Middle East. An Arab Saudi military spokesperson stated the country intercepted several missiles launched across the Red Sea, including one targeting the Yanbu oil export port. Three drones were also destroyed in Riyadh and the southern region.
This week, Iran-backed Houthi forces in Yemen repeatedly attacked Arab Saudi. Arab Saudi's Ministry of Energy reported that an administrative building of the Saudi Aramco oil and gas corporation in Dhahran was hit by a missile on 14/10. Previously, the Houthi attacked Riyadh International Airport on 10/10, resulting in 12 deaths and over 300 injuries.
Concurrently, in the Strait of Hormuz, at least 9 oil tankers and cargo ships have been attacked since last Sunday, as Iran attempts to tighten oil exports through the strait. According to the International Maritime Organization (IMO), this week's attacks injured three crew members and left two missing.
Crude oil exports through the Strait of Hormuz have decreased after reaching pre-conflict levels in September. Energy research firm Kpler reported that oil shipments through the strait averaged 9.4 million barrels per day for the week ending 14/10, representing 70% of the pre-conflict average.
Adding to the market volatility, a "halt to energy infrastructure attacks" agreement, brokered by US President Donald Trump between Ukraine and Russia, quickly collapsed. The Kremlin continued its attacks on Ukrainian infrastructure despite the supposed agreement. Ukrainian President Volodymyr Zelenskyy stated that Ukraine would resume attacks on Russian oil refineries in retaliation.
Beyond geopolitical conflicts, US crude oil prices were also boosted by a commercial inventory drop of over 8 million barrels for the week ending 9/10. This was due to production halts in the US Gulf of Mexico region caused by Hurricane Isaias, according to the US Energy Information Administration (EIA).
Ha Thu (according to CNBC, Reuters)
