Oil prices climbed more than 3% on Thursday, reaching their highest level in a week, as a Houthi missile attack on Saudi Arabia renewed concerns about Middle East supply disruptions. Brent crude futures settled at $106.60 a barrel, up $3.52, or 3.4%, while WTI rose $2.45, or 2.7%, to $94.61. Both contracts were up about 5% at their session highs before giving back some gains as reports emerged of U.S.-Iran discussions over reopening the Strait of Hormuz.

Saudi Arabia said it intercepted six ballistic missiles launched by Yemen’s Iran-backed Houthis toward areas including Taif and the Yanbu region on the Red Sea. The attack renewed concerns about the security of Saudi oil infrastructure and export routes, particularly after earlier attacks forced the shutdown of the East-West pipeline and disrupted Yanbu crude loadings.

Saudi Arabia is now increasing crude volumes through the East-West Pipeline toward Yanbu, although tanker loadings at the Red Sea port had not yet resumed, according to industry and shipping data.

At the same time, diplomatic efforts between Washington and Tehran are continuing. U.S. and Iranian negotiators in New York are discussing a potential phased agreement that could involve Iran reopening the Strait of Hormuz in exchange for the United States lifting its economic blockade. The strait remains a major pressure point for the global oil market, making any improvement in traffic through the waterway potentially significant for prices.

The market is also dealing with a tightening diesel situation. Global diesel supplies remain constrained by disruptions to Russian refining and exports, as well as attacks on energy infrastructure in the Middle East. U.S. diesel prices have reached record highs in recent weeks.

The possibility of a U.S. diesel export restriction is adding another layer of uncertainty. Energy Secretary Chris Wright has been speaking with major U.S. refiners about whether they would voluntarily reduce diesel exports, according to people familiar with the discussions. Earlier reports that the administration was preparing a 90-day export ban were disputed by Wright.

The oil market remains caught between two opposing forces: renewed attacks on Saudi Arabia and continued restrictions around the Strait of Hormuz are supporting prices, while negotiations between the U.S. and Iran could eventually increase oil flows and reduce the supply risk premium.

• Where: Loews Arlington Hotel
• Attending: Brian Baker (239.297.4519), David Cohen (954-729-4774), and Curtis Chandler (239-405-3365)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: David Cohen (954-729-4774), and Curtis Chandler (239-405-3365)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: Brian Baker (239.297.4519)
• Conference Website