Global benchmark crude is pressing toward the $100-per-barrel mark after Saudi Arabia suspended operations at several energy facilities near its border with Yemen, underscoring the region's supply vulnerabilities.
International benchmark prices approached $99 a barrel following the temporary shutdown of multiple southern installations after an assault triggered fires. Tuesday's attack marks the latest in a sequence of aerial strikes in the area, with a major refinery previously forced offline due to similar incidents.
Renewed tensions between the United States and Iran have fueled concerns that shipping through the Strait of Hormuz could face more severe disruptions, providing additional upward momentum for crude prices.
"The market is increasingly pricing in the possibility of a prolonged conflict in the Middle East," noted Goldman Sachs Group analyst Daan Struyven in a report, while modestly raising oil price forecasts based on assumptions that shipping disruptions could extend into 2027. "The risk to our price projections remains clearly tilted to the upside."
Since the conflict escalated in late February, Brent crude has climbed more than 30%, although prices remain well below the $126-per-barrel peak touched in late April. Refined fuels such as diesel have posted even sharper gains, with the Russia-Ukraine war compounding market tensions.
Despite the risks to Hormuz transits, oil continues to flow from the Persian Gulf. Traders are closely watching negotiations between Iran and Oman regarding an agreement to manage passage through the strategic waterway. Tehran and Muscat have been exploring formal oversight of the strait, which could eventually lead to the imposition of transit fees.
Washington's blockade of Iranian ports aims to curtail the country's exports, with the United States seeking to restore the strait to its pre-conflict status of free navigation.
At 08:13 London time, the November Brent contract gained 1.8% to $98.70 per barrel, while the October WTI contract rose 2.8% from Friday's settlement to $94.08 a barrel. US markets were closed Monday for a holiday.
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