Brent hits five-month high on escalating Middle East conflict
- US plans to withdraw family members from regional missions, US officials say Saudi Aramco asks staff to evacuate headquarters in Dhahran,
- Iran IRGC Navy says seven vessels hit
- EU Parliament votes to approve 3-year delay on methane emissions rules for oil, gas imports
Reuters photo.
Brent prices rose to their highest since May on Thursday after more Houthi attacks in Saudi Arabia stoked concerns over an escalation of the Middle East conflict and further disruptions to crude oil supplies from the world's key exporting region.
Brent crude futures climbed $3.19, or 2.9%, to $112.01 a barrel by 1311 GMT. They hit $112.68 a barrel earlier in the session, the highest since May 18.
US West Texas Intermediate crude gained $2.41, or 2.5%, to $99.56, after hitting $100.09 a barrel earlier.
"Reports of Middle East crude oil exports exceeding pre-conflict levels are more than countered by attacks on ships in the Strait of Hormuz and the Houthi strikes on Saudi Arabia and on its oil infrastructure," PVM Oil analyst Tamas Varga said.
"No de-escalation is anticipated until the US midterm elections, which should keep oil prices elevated."
Morgan Stanley analysts estimated in a note that Middle East crude oil exports were around 17 million barrels per day last week.
Oil giant Saudi Aramco (2223.SE), opens new tab instructed staff to evacuate its headquarters in Dhahran and work remotely, six people with knowledge of the matter said on Thursday. The US State Department has ordered some diplomats and family members to leave its missions in Saudi Arabia and plans to withdraw family members from a number of other US missions in the Middle East, US officials told Reuters.
The decisions came after Yemen's Iran-aligned Houthis struck several targets in Saudi Arabia on Wednesday with at least one person killed and eight more wounded at a civilian airport in Dammam, and two people killed in a drone attack on a Saudi oil field. Explosions were also heard in Sirik in southern Iran, Iranian media reported on Wednesday, saying the nature and origin of the explosions were unknown.
Supply disruption continued to affect global inventories. Iran's Islamic Revolutionary Guard Corps Navy said on Thursday that four vessels involved in illegal oil transfers in the northern Gulf were simultaneously hit and caught fire after being tracked by its forces on Wednesday. The IRGC added that three more vessels collided with mines west of the Strait of Hormuz.
Meanwhile a valve on an oil pipeline running from Libya's Hamada and Tahara oilfields to Zawiya port has been shut, leading to a reduction in production at both fields, the head of Libya's National Oil Corporation told Reuters.
Seeking to contain prices that have surged on diesel shortages due to the US-Israeli war with Iran and the Russian war in Ukraine, the Trump administration is offering to loan up to nearly a third of the 1-million-barrel US emergency heating oil reserve.
The European Parliament also voted to approve a three-year delay to the EU's methane emissions rules for oil and gas imports, after pressure from governments including France and the US.
