Oil Prices Jump Over $3 as Houthi Attacks Push Brent to Highest Close Since April
By Mashood Siddiqi — SCN NEWS
NEW YORK, — Oil prices surged more than $3 a barrel on Friday, with international benchmark Brent recording its highest settlement since April, as attacks on Saudi Arabia by Yemen's Houthi movement and a reported tanker oil spill off the United Arab Emirates intensified concerns about the security of Middle Eastern energy supplies.
Brent crude futures settled at $116.72 a barrel, gaining $3.55, or 3.14%, to close at their highest level since April 29. U.S. West Texas Intermediate crude rose $3.80, or 3.8%, to $103.27 a barrel. Brent advanced approximately 6% during the week, while WTI gained 2.3%, reflecting renewed concern about the stability of oil production and maritime transportation across the region.
The price increases followed a series of attacks attributed to the Iran-aligned Houthi movement against targets in Saudi Arabia, including energy infrastructure. The developments have increased concern that further escalation could threaten production facilities, shipping operations and export routes serving one of the world's most important petroleum-producing regions.
Saudi Aramco ordered employees to evacuate its headquarters in Dhahran on Thursday as fighting between Saudi Arabia and the Yemen-based Houthis intensified. The precautionary move drew attention to the potential exposure of major energy operations to the expanding conflict, although the evacuation itself did not establish that the company's headquarters had been struck.
A separate maritime incident added to market uncertainty on Friday when the United Arab Emirates reported an oil spill from a tanker off the coast of Umm Al Quwain. The country's Ministry of Climate Change and Environment confirmed the spill but did not identify the vessel or establish what caused the discharge.
The distinction matters because the reported spill occurred during a period of heightened attacks and security warnings affecting commercial shipping in nearby waters. There is no confirmed evidence that the spill was caused by a Houthi strike, an Iranian operation or any other deliberate attack. Investigators have yet to establish the circumstances surrounding the incident.
Shipping risks were already elevated following earlier reports of attacks on vessels operating near the Strait of Hormuz. Maritime sources reported that the supertanker Gem No. 2 was struck by an unidentified projectile on October 9, approximately 13 nautical miles west of Al Jazeera in the UAE. The identity of those responsible for that incident has not been established.
The security situation has also deteriorated around the Bab el-Mandeb Strait, the narrow passage linking the Red Sea with the Gulf of Aden. Fighting between Houthi forces and the Saudi-led coalition supporting Yemen's internationally recognized government has raised concerns about the safety of ships approaching the waterway.
Both Bab el-Mandeb and the Strait of Hormuz are important to global energy transportation, although they serve different shipping routes. Disruptions near either passage can increase insurance premiums, raise freight costs and encourage vessel operators to consider longer journeys. Those additional expenses can affect the delivered cost of petroleum even when production continues.
Energy markets are therefore responding not only to barrels that have already been lost but also to the possibility of further interruptions. The uncertainty surrounding future supply has encouraged traders to place a higher value on available crude, particularly as governments and companies assess the risks of continued military escalation.
The broader confrontation involving the United States, Israel and Iran has added another layer of uncertainty. President Donald Trump said Friday that the United States could bring its war with Iran to an end quickly, while also raising the possibility of allowing the conflict to wind down more gradually. The remarks left investors assessing the likelihood of further military action and its consequences for regional energy flows.
Washington has taken emergency steps to address specific domestic supply problems. The U.S. Department of Energy authorized an exchange of up to 400,000 barrels of crude oil from the Strategic Petroleum Reserve to respond to a disruption affecting the Phillips 66 refinery in Lake Charles, Louisiana.
The authorization is an emergency exchange rather than a permanent increase in U.S. oil production. It is intended to address a particular refinery supply interruption and should not be interpreted as a measure capable, on its own, of reversing the global rise in crude prices.
Germany is also preparing to draw on emergency petroleum stocks. Its national oil stockpiling agency, EBV, circulated a tender covering diesel, heating oil and crude oil, marking the country's first releases from strategic reserves since Group of Seven nations agreed earlier this month to make additional supplies available.
Emergency reserves can help stabilize markets during temporary shortages, but their effectiveness depends on the volume released, delivery arrangements and the duration of any underlying disruption. They cannot permanently replace production capacity or eliminate security risks along major shipping routes.
Supply concerns extend beyond the Gulf. Libya's National Oil Corporation reported that a pipeline valve connecting the Hamada and Tahara oilfields with Zawiya port had been shut, reducing production at both fields. Although unrelated to the Houthi attacks, the interruption added to the series of developments affecting the availability of crude.
Meanwhile, a tanker carrying Russian diesel was heading toward New York following an export agreement between Moscow and Washington. The shipment forms part of the Trump administration's effort to increase fuel availability as American businesses face elevated diesel prices ahead of the November 3 congressional midterm elections.
The renewed flow of Russian diesel illustrates the difficult policy choices facing energy-importing countries. Governments seeking to ease fuel shortages must weigh immediate supply requirements against sanctions policies, diplomatic commitments and broader security considerations.
Higher crude prices are also placing additional pressure on the wider economy. Petroleum costs influence the price of gasoline, diesel, aviation fuel and numerous industrial products. Sustained increases can raise transportation and manufacturing expenses, although the impact on consumers varies with refining margins, taxes, supply contracts and local market conditions.
For farmers and freight operators, diesel prices remain a particularly important concern because fuel is a direct operating expense. The Trump administration has introduced temporary tax-related measures and additional agricultural assistance, but international crude prices continue to affect the underlying cost of refined petroleum products.
The oil rally coincided with a decline in U.S. equities on Friday. Higher energy costs contributed to investor concerns about inflation and the outlook for economic growth, although technology-sector valuations and interest-rate expectations were also important factors behind the stock market's losses.
Despite the latest rise in crude prices, U.S. drilling activity showed little immediate change. Energy services company Baker Hughes reported that the combined oil and natural gas rig count remained unchanged at 603 during the week ending October 23. Rig counts provide an indication of future drilling activity but do not measure how much oil is available for immediate delivery.
The latest settlement leaves global oil markets sensitive to developments in Saudi Arabia, the United Arab Emirates, Yemen and Iran. Further attacks or confirmed disruptions to export infrastructure could increase pressure on supplies, while improved maritime security or reduced military tensions could ease some of the uncertainty.
For now, Friday's closing prices reflect a market confronting several simultaneous risks: threats to energy infrastructure, uncertainty over commercial shipping, localized production interruptions and growing reliance on emergency government measures. The central question is whether those disruptions remain limited or begin to affect the sustained flow of crude and refined fuels to international buyers.