Oil Rises as Middle East Attacks Intensify, WTI Nears $95 a Barrel

Oil prices are climbing as a string of attacks on tankers and major oil facilities in the Middle East deepens concerns over supply disruptions.

Bloomberg reported on October 13 that West Texas Intermediate was trading near $95 a barrel, extending the previous day's gains. Brent crude, the global benchmark, finished the prior session below $106 a barrel, but mounting military tensions in the Middle East continue to cloud the supply outlook.

Oil shipments through the Persian Gulf had recently recovered to near prewar levels. Still, renewed Iranian attacks on tankers in the Strait of Hormuz are fueling concern that the normalization of supply could be derailed. The U.S. government said it had provided support for the transport of more than 19 million barrels of crude through the strait. As the risk of Iranian attacks rises, some very large crude carriers have reportedly scrapped plans to enter the Persian Gulf and altered course.

Saudi Arabia is also facing continued attacks from Yemen's Houthi rebels. Saudi authorities said they intercepted additional missiles and drones launched by the Houthis. A day earlier, the headquarters complex of state-owned oil company Aramco in Dhahran, eastern Saudi Arabia, was damaged in an attack. The Houthis had previously targeted a major airport in Riyadh, while Saudi-backed forces are conducting operations to retake rebel-held areas in Yemen.

Oil prices have surged this year amid the war between the U.S. and Iran. Brent has jumped more than 70% since the start of the year, and tensions in energy markets have intensified as attacks have spread from production facilities to shipping routes. Repeated strikes on tankers in the Strait of Hormuz are also raising concern that stable exports of Middle Eastern crude may become harder to maintain.

Pavel Molchanov, an analyst at Raymond James, said that while new developments are emerging every day, the broader situation in the Persian Gulf has not changed much over the past three months. He added that tanker operators are becoming increasingly accustomed to ship-to-ship crude transfers at sea in an effort to keep exports flowing while reducing the risk of Iranian attacks.