Oil Surges Above $106 Amid Rising Saudi Supply Risks
Oil prices rose amid escalating risks to Saudi supplies due to Houthi attacks, while major oil companies' profits strengthened despite losses in the gas sector.
Translated by Qiyas from الوسط — Original source
BP estimated that refining margins in the third quarter tripled compared to the same period last year, as the Iran war boosted profits for major oil companies, but it also noted impairment losses ranging from $3 billion to $4.5 billion related to its gas and renewable energy sector.
Oil prices rose as traders assessed supply risks stemming from clashes between Iran-backed Houthi militias and Saudi Arabia, against expectations of increased Russian diesel exports, which could ease market supply tightness. Brent crude futures rose 89 cents, or 0.8 percent, to $106.58 per barrel by 00:30 GMT, while US West Texas Intermediate (WTI) crude futures rose 80 cents, or 0.9 percent, to $94.94 per barrel. Brent had previously fallen 0.9 percent, while US crude had risen 0.4 percent.
Hiroyuki Kokawa, chief strategist at Nissan Securities Investment, said supply concerns driven by the conflict between the Houthis and Saudi Arabia are pushing prices higher. However, he added that expectations of increased Russian diesel exports could limit sharp price movements in either direction, forecasting WTI to trade between $90 and $100 per barrel.
In a development heightening security fears, Saudi Arabia’s Ministry of Energy announced that Houthi forces targeted an administrative building belonging to Saudi Aramco in Dhahran, causing a limited fire.
These developments follow Saudi Arabia’s increase in oil production last month, despite disruptions to shipments caused by the US-Iran war, a rise that contributed to higher output from the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and other producing nations including Russia, according to OPEC.
In a related development, two senior Iranian officials told Reuters that Iran is using new tactics to target ships in the Strait of Hormuz, aiming to keep oil prices high and influence the US midterm elections.
Meanwhile, the Russian government stated it sees no direct link between peace talks with Ukraine and the agreement on diesel exports to the United States. The statement came after a Reuters report indicated that US envoys had informed Ukrainian officials that the deal is part of efforts to bring Russia back to war settlement negotiations.
