Oil Rises Amid Threats of Storms and Airstrikes to Supplies - Sarmad
Oil prices rose on Wednesday as markets assessed supply constraints stemming from a storm heading toward U.S. oil-producing regions and Houthi attacks in Yemen, allied with Iran, against Saudi Arabia, offset by increased crude oil supplies from the Middle East.
Brent crude futures rose 93 cents, or 0.92 percent, to $101.51 per barrel by 00:22 GMT. U.S. West Texas Intermediate crude rose 82 cents, or 0.92 percent, to $90.25 per barrel.
U.S. meteorologists said on Tuesday that a storm forming in the Gulf of Mexico would become the first Atlantic hurricane of 2026 within two days and was likely to strike oil and gas production facilities.
Offshore areas in the Gulf of Mexico, located in the storm’s path, produce 15 percent of U.S. crude oil and 5 percent of the country’s natural gas.
Tim Waterer, chief analyst at KCM Trade, said the storm represents an “unwelcome obstacle for crude oil, increasing the likelihood of disruptions in production and refining at a time when the market is already grappling with supply-related issues.”
The storm could affect six refineries. Refineries in U.S. Gulf Coast states account for about 50 percent of the country’s total production capacity of 18.2 million barrels per day.
Market sources on Tuesday, citing data from the American Petroleum Institute, reported that U.S. crude oil and gasoline inventories fell, while distillate inventories rose marginally last week.
Crude oil inventories dropped by 2.09 million barrels in the week ending October 2.
Saudi Energy Minister Prince Abdulaziz bin Salman said the volume of oil flowing through the East-West pipeline rose to 5.8 million barrels by Tuesday morning.
The chief executive of Vitol, the commodity trading firm, said on Tuesday that approximately 12 million barrels per day of crude oil and 2 million barrels per day of refined products had left the Middle East region on tankers over the past seven to ten days.
However, the Saudi Civil Aviation Authority said King Abdullah bin Abdulaziz International Airport in Jazan and Najran International Airport were attacked on Monday evening, amid escalating combat operations between the kingdom and the Yemeni Houthi group.
The attacks came as Saudi-backed Yemeni government forces launched a major offensive to reclaim territory from the Houthis, with Riyadh intensifying its air strikes in support of the campaign.
Mukesh Haidef, chief oil analyst at X Analytics in Sydney, said the attacks and refinery shutdowns are “likely to keep refining margins elevated, and the problem will spill over into crude oil. Prices will remain near the $100 level without any tangible easing.”
U.S.-Iran relations have not moved any closer to a resolution, as U.S. President Donald Trump said on Tuesday that no one knows who is running Iran amid the ongoing eighth-month war between the United States and Israel on one side and Iran on the other.
Iranian Foreign Ministry spokesperson Esmail Baghaei said on Sunday that U.S. officials are well aware of who their Iranian counterparts are and how decision-making works in Tehran.
