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Oil prices rise as Houthi attacks on Saudi Arabia stoke supply fears

Brent crude tops $101 as geopolitical risks offset improving physical supply

By LineZotpaper
Published
Read Time2 min
Oil prices climbed on Wednesday as attacks by Yemen's Iran-backed Houthis on Saudi airports raised concerns about crude flows from the Middle East, even as supplies show signs of recovery. Brent crude for December delivery rose 1.17% to $101.76 a barrel, while US West Texas Intermediate for November advanced 1.26% to $90.57.

Oil rose Wednesday as attacks by Yemen's Iran-backed Houthis on Saudi Arabia heightened concerns over potential supply disruptions from the Middle East, overshadowing improving supply fundamentals.

Saudi Energy Minister Prince Abdulaziz bin Salman said oil pumped through the East-West Pipeline had reached 5.8 million barrels as of Tuesday morning, indicating a partial recovery. But the Saudi aviation authority reported that airports in Jazan and Najran were targeted in two attacks amid escalating hostilities between the Houthis and the kingdom.

"The sustained ability of the Houthis in Yemen to target oil facilities hundreds of kilometers from the border keeps the risks of a renewed large-scale crude supply disruption present and high," said Samer Hasn, senior market analyst at forex trading platform XS.com. He added that risks could worsen if the Houthis apply more pressure after losing territory.

Naeem Aslam, chief investment officer of Zaye Capital Markets, said oil remains caught between improving physical supply and persistent geopolitical risk.

The attacks come as the conflict in Yemen continues, with Iran-backed Houthi forces frequently targeting Saudi infrastructure. While the East-West Pipeline restoration has helped steady supplies, traders remain wary of any escalation that could cut off major export routes.

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Analysis

Why This Matters

  • Higher oil prices feed into petrol costs and inflation, affecting households and businesses globally.
  • The Strait of Hormuz chokepoint remains a critical risk; sustained disruptions could shock the global economy.
  • The tension between improving supply and geopolitical risk leaves markets vulnerable to sudden spikes.

Background

The Houthi movement, backed by Iran, has been fighting a Saudi-led coalition in Yemen's civil war since 2014. The group has repeatedly targeted Saudi oil infrastructure and airports with drones and missiles. The East-West Pipeline, which bypasses the Strait of Hormuz, suffered damage in earlier attacks but is being restored. On Tuesday, the Saudi aviation authority said airports in Jazan and Najran were attacked, underscoring the persistent threat.

Key Perspectives

Saudi Arabia: The kingdom is working to restore pipeline capacity and defend its infrastructure, but faces a protracted conflict on its southern border. Houthis: The group sees attacks on Saudi assets as leverage to pressure the coalition and gain territorial concessions. Oil Markets: Traders are balancing improved physical supply against the risk that Houthi attacks escalate, forcing supply cuts.

What to Watch

  • Further reports of attacks on Saudi energy or transport infrastructure in the coming days.
  • The pace of East-West Pipeline recovery and any official updates on production from Saudi Aramco.
  • Diplomatic moves in Yemen peace talks that could reduce or intensify Houthi attacks.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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