Crude Oil Soars $3 as Hormuz Disruptions Threaten Global Supply

By Adedapo Adesanya

Crude oil jumped by $3 on Thursday after attacks on Saudi energy infrastructure escalated and shipping disruptions through the Strait of Hormuz threatened global oil flows.

Brent futures settled at $95.82 a barrel, up $3.06 or 3.3 per cent, while US West Texas Intermediate (WTI) crude closed at $88.74 a barrel, up $2.21 or 2.6 per cent.

Yemen’s Iran-aligned Houthis said they attacked a pumping station on the Saudi East-West oil ​pipeline; an oil facility in the Saudi Red Sea city of Yanbu; and an Aramco building ⁠in the capital, Riyadh.

Later, the Saudi-led military coalition fighting the Houthis said it had intercepted and destroyed two drones launched by the ​group, one in the Riyadh region and another in the kingdom’s oil-rich Eastern Province.

On Thursday, Iran’s military said four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings.

Attacks on shipping in the Middle East have increased in recent weeks at the Strait of Hormuz, ​which carries nearly one-fifth of the world’s crude oil, before the US-Israeli conflict with Iran.

Elsewhere, Ukraine said its drones hit the port area of ​Ust-Luga on the Baltic Sea in Russia’s northwest, triggering a fire and damaging part of its network of fuel tanks, its latest attack on Russian ‌energy infrastructure.

Meanwhile, Ukraine peace talks between Russian President Vladimir Putin and US ​negotiators Steve Witkoff ⁠and Jared Kushner began in the Kremlin. In a potential breakthrough, a US envoy said Putin agreed to include European representatives in the next round of negotiations.

Also weighing on prices, data from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) showed crude production rose in October, driven by higher Saudi Arabian ​output despite shipping disruptions in the Middle East.

The US government is reportedly set to extend a waiver of ⁠a US ​law in the coming days, allowing some foreign-flagged ships to transport oil and ​other commodities between US ports.

Crude oil inventories in the US saw an increase of 4.7 million barrels during the week ending November 6, according to new data from the Energy Information Administration (EIA) released on Thursday.

The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories had risen by 9.0 million barrels in the period.