Oil jumps on escalating Middle East conflict

By Seher Dareen

LONDON, Oct 22 (Reuters) - Brent prices ‌rose to their highest since ​May on ​Thursday after more Houthi attacks in Saudi Arabia stoked concerns over an escalation of the Middle East conflict and further disruptions to crude oil supplies from the world's key exporting region.

Brent crude futures climbed $3.06, or 2.81%, to $111.88 ‌a barrel by 1104 GMT. They hit $112.55 a barrel earlier in the session, the highest since May ⁠18.

US West Texas Intermediate crude gained $2.04, or 2.1%, to $99.19, after hitting $100.07 a barrel earlier.

"Reports of Middle East crude oil exports exceeding pre-conflict levels are more than countered ‌by attacks on ships in the Strait ‌of Hormuz and the Houthi strikes on Saudi Arabia and on its oil infrastructure," PVM Oil analyst Tamas Varga said.

"No de-escalation is anticipated until the US midterm elections, which should keep oil prices elevated."

Morgan Stanley analysts estimated in a note that Middle ​East crude oil exports were around 17 million barrels per day last week.

Oil giant Saudi Aramco instructed staff to evacuate its headquarters in Dhahran and work remotely, six people with knowledge of the matter said on Thursday. The US State Department has ordered some ⁠diplomats and family members to leave its missions in Saudi Arabia and plans to withdraw family members from a number of other US missions in the Middle East, US ​officials told Reuters.

The decisions came after Yemen's Iran-aligned Houthis struck several targets in Saudi Arabia on Wednesday with at least one person killed and eight more wounded at a civilian airport in Dammam, and ​two people killed in a drone attack on a Saudi oil field. Explosions were ‌also heard in Sirik in southern Iran, Iranian media reported on Wednesday, saying the nature and origin of the explosions were unknown.

Supply disruption continued to affect global inventories. Iran's Islamic Revolutionary Guard Corps Navy said on ⁠Thursday that four vessels involved in illegal oil transfers in the northern Gulf were simultaneously hit and caught fire after being tracked by its forces on Wednesday. The IRGC added that three more vessels collided with mines west of the Strait of Hormuz.

Meanwhile a valve on an oil pipeline running from ⁠Libya's Hamada and Tahara oilfields to Zawiya port has been shut, leading to a reduction in production at both fields, the head of Libya's National ​Oil Corporation told Reuters.

Seeking to contain prices that have surged on diesel shortages due to the US-Israeli war with Iran and the Russian war in Ukraine, the Trump administration is offering to loan up to almost a third of the 1-million-barrel US emergency heating oil reserve.

The European Parliament also ‌voted to approve a three-year delay to the EU's methane emissions rules for oil and gas imports, after pressure from governments including France and the US.

Russian President Vladimir Putin hosted US Special Envoy Steve ‌Witkoff in St Petersburg on Wednesday for talks on ending the war in Ukraine amid Washington's latest push to stop Europe's bloodiest conflict since World ⁠War Two.

The Kremlin said Putin had agreed to resume ‌US-mediated peace talks with Ukraine as soon ​as next month. Ukrainian President Volodymyr Zelenskiy said he supported the talks and hoped they would start as soon as possible.

(Reporting by Arathy Somasekhar in Houston and Siyi Liu in Singapore; Editing by Kate Mayberry, Saad Sayeed ‌and Emelia Sithole-Matarise)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• US crude oil inventories drop 3.06 million barrels
• Putin's Aide Says War In Ukraine Moving Toward An End - Vesti
• French debt risk premium reaches euro zone sovereign crisis levels