Oil Prices Surge Above $111 as Houthis Strike Saudi Targets
Crude oil prices extended their earlier gains today, with Brent crude keeping above $111 per barrel after the latest reports from the Middle East, featuring more Houthi attacks on Saudi targets.
An order by the U.S. federal government for non-emergency personnel in the kingdom to leave contributed to the perception of an unstable security situation in a key oil region.
At the time of writing, Brent crude was trading at $111.10 per barrel, with West Texas Intermediate at $98.98 per barrel, both up by around 2% from Wednesday, after the Yemeni Houthis struck an oil field in Saudi Arabia and another international airport.
Meanwhile, Iranian media reported explosions in the southern part of the country, without specifying the nature or origin of these. Separately, in an op-ed for the Financial Times, Iran’s foreign minister Abbas Araqchi said Iran was ready to defend itself and suggested the chances of a peace deal are slim. “To state the obvious, we have no trust whatsoever in the sincerity of the US administration’s professed desire for peace with Iran,” Araqchi wrote, noting two occasions where the U.S. attacked Iran while negotiating on the nuclear deal.
In a separate statement, the country’s president, Masoud Pezeshkian, told media that peace talks could not proceed while the United States had a blockade on Iran and issued threats against the country. With this, the prospect of peace in the Middle East remains remote, with all due implications for oil and gas trade.
ING’s commodity analysts, meanwhile, noted a Kuwaiti update on oil production, with the daily total topping 2 million barrels. While this is a positive development, the update, from the chief executive of Kuwait Petroleum Corp, also mentioned fuel production, which remains quite problematic, with flows still significantly lower than they were before the war.
