Oil prices climbed on Tuesday as Yemen's Houthi militants launched attacks on multiple energy facilities across Saudi Arabia, forcing temporary shutdowns of some operations. By 11:28 a.m. ET, Brent crude futures were up 1% at $97.99 per barrel, with the international benchmark touching an intraday high of $99.46. Meanwhile, U.S. West Texas Intermediate crude futures gained 1.55% to trade at $92.90 per barrel.
September has seen crude prices jump over 8% following the first direct military exchanges between the U.S. and Iran since July. According to Saudi Arabia's foreign ministry, Houthi militants targeted civilian and economic assets in the cities of Abha, Khamis Mushait, Jizan, and Najran, with over 70 civilians reportedly injured in the strikes.
Saudi Arabia's energy ministry confirmed in a statement that the attacks ignited fires at several energy installations, causing temporary production halts. The world's largest oil exporter added that emergency response teams are working to contain the blazes and assess the extent of the damage. Riyadh did not disclose the specific types of energy sites that were hit.
Houthi official media outlets reported that the group used drones and ballistic missiles to strike Saudi Aramco facilities in the kingdom's southern regions. In response, the Saudi foreign ministry affirmed the nation's "legitimate right to take all necessary measures to defend its sovereignty, protect national assets, and safeguard the security and safety of its citizens and residents."
The latest escalation follows U.S. military strikes on three Iranian oil tankers on Saturday, which were carried out in retaliation for Iran's ballistic missile attacks on two naval vessels. Iran's foreign ministry condemned the tanker strikes as a "war crime" and an act of "economic warfare" in a statement issued Saturday, noting that Tehran has repeatedly targeted commercial ships during the ongoing conflict.
"If you strike our assets, you will be struck as well," Mohammad Bagher Qalibaf, Iran's parliament speaker, wrote on X on Monday. The post was a retort to comments from Defense Secretary Pete Hegseth, who had warned that the U.S. would "destroy (and sink)" Iranian tankers if Iran fired on American ships.
Goldman Sachs raised its Brent and WTI price forecasts by $5 on Monday, setting December 2026 targets at $85 and $80 per barrel respectively, while 2027 projections were lifted to $80 and $75. The investment bank cautioned that if Gulf crude production remains 4 million barrels per day below pre-war levels, Brent could surge past $120 per barrel by 2027, though this is not the firm's base-case scenario.
"We believe that more intense shipping attacks in the Strait of Hormuz and the Red Sea are the most likely drivers of this low-production, high-price scenario," said Daan Struyven, head of oil research at Goldman Sachs, in a Monday report. The bank expects Middle East shipping disruptions to persist through 2027, with production gradually recovering in the second half of the year.
"The market is increasingly pricing in a prolonged Middle East conflict," Struyven added. President Trump posted on Monday that "oil prices will drop dramatically when we win the war against Iran."
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