Key Takeaways
- Oil prices rose sharply, with Brent crude futures reaching their highest level since September.
- Attacks on Saudi Arabia, including missile strikes on Riyadh’s international airport, intensified supply concerns.
- Houthi missile attacks on oil infrastructure and tankers in the Strait of Hormuz raised fears of supply disruptions.
Oil prices surged on Monday, with Brent crude futures settling at $106.65 a barrel, the highest since September 15, and US West Texas Intermediate crude rising to $93.74 a barrel.
The rise in oil prices was driven by attacks on Saudi Arabia, which have raised concerns about the stability of oil supplies from one of the world's largest producers.
The Houthis claimed responsibility for a Saturday strike on Riyadh’s international airport that killed 13 people and wounded over 300, intensifying the conflict.
Further attacks on Sunday, including missile strikes on Saudi Arabia’s refineries, added to the supply concerns, with five refineries temporarily closed.
Attacks on tankers in the Strait of Hormuz, including a drone strike near Oman’s Sohar and another damaged tanker, have also threatened Middle East crude exports.
Investor and analyst Louis Navellier stated, 'The shocking Houthi missile attack on Saudi Arabia’s Riyadh airport will obviously escalate the retaliation against the Houthis in Yemen.'
SEB commodities analyst Bjarne Schieldrop noted, 'The sense of some kind of normality of exports from the Strait of Hormuz was shattered last week. Fresh attacks by the Houthis on Saudi Arabia added to this and helped to lift prices.'
Goldman Sachs raised its Brent price forecast for December to $90 a barrel from $85, estimating a risk premium of just over $20 a barrel.
In the Gulf of Mexico, energy majors Shell, Chevron, and BP were seeking to redeploy personnel and restore production at their platforms after Hurricane Isaias made landfall early on Saturday.
Russian diesel exports to the US and global markets were announced, but analysts noted that the immediate impact on oil prices was questionable due to reduced refining capacity.
The shocking Houthi missile attack on Saudi Arabia’s Riyadh airport will obviously escalate the retaliation against the Houthis in Yemen.
Louis Navellier, Investor and analyst
The sense of some kind of normality of exports from the Strait of Hormuz was shattered last week. Fresh attacks by the Houthis on Saudi Arabia added to this and helped to lift prices.
Bjarne Schieldrop, SEB commodities analyst
