New Delhi, October 20: Crude oil prices witnessed a sharp rally on Monday, with Brent crude crossing $110 per barrel, its highest level in five months, amid growing concerns over supply disruptions in West Asia.
US West Texas Intermediate (WTI) crude rose $2.25 to $103.66 per barrel, while Brent touched $110, according to reported prices around 9 am IST.
Here are four major factors driving oil prices higher.
1. Houthis Claim Attacks On Saudi Facilities
Yemen’s Houthi fighters claimed responsibility for attacks targeting several important facilities in Saudi Arabia.
The reported targets included Riyadh’s King Khalid International Airport, Abha International Airport, Saudi Aramco’s Yanbu facilities and the Shaybah oilfield.
However, CNBC International said it could not independently verify these claims, while Saudi authorities had not issued an immediate statement.
The reports raised concerns about potential disruptions to oil production and transportation.
2. Saudi Arabia Postpones Investment Conference
Saudi Arabia reportedly postponed its upcoming Future Investment Initiative conference until next year amid growing security concerns.
The four-day event was scheduled for the following week.
The postponement added to market uncertainty over the security situation in West Asia.
Investors fear that further escalation could affect energy infrastructure and global oil supplies.
3. Tanker Attacks Raise Shipping Concerns
According to the United Kingdom Maritime Trade Operations (UKMTO), two tankers were reportedly attacked near Saudi Arabia’s coast in the Persian Gulf.
One incident involved a rocket-propelled grenade reportedly fired from a small boat northeast of Al Jubail.
Another tanker, identified as ST3, was reportedly struck by an unidentified object.
Such incidents increase concerns about shipping safety and potential disruptions to crude oil exports through important maritime routes.
4. Russia-Ukraine Conflict Adds Supply Risks
Reports of Ukrainian drone attacks on Russian energy facilities also contributed to uncertainty.
A major oil terminal and depot in St Petersburg reportedly caught fire following attacks on Sunday.
According to Kpler, the terminal handles approximately 1,20,000 barrels of refined petroleum product exports daily.
However, the extent of the damage remained unclear.
Reports of potential additional Russian oil supplies provided some relief, limiting further price increases.
What Lies Ahead For Crude Oil?
Oil prices will remain sensitive to developments in West Asia, tanker security and the Russia-Ukraine conflict.
Traders will closely monitor actual supply disruptions, shipping movements and potential increases in Russian exports.
While geopolitical tensions have pushed Brent towards $110 per barrel, additional supplies could help ease upward pressure.
