Oil prices moved higher on Wednesday as escalating attacks on Saudi energy infrastructure and growing threats to shipping through the Strait of Hormuz increased concerns over global supply disruptions. The latest developments in the Middle East outweighed expectations that additional Russian diesel exports could help ease tight fuel markets.

Brent crude futures rose 37 cents, or 0.35%, to settle at $106.06 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 95 cents, or 1.01%, to settle at $95.09 a barrel, its highest closing price in three weeks.

Tensions intensified after Iran-backed Houthi forces attacked an administrative building belonging to Saudi Aramco in Dhahran, causing a limited fire. Iran has also indicated that it is changing its tactics to increase pressure on shipping, raising concerns about additional attacks on vessels moving through the region. A container ship reportedly sank after striking a naval mine south of the Strait of Hormuz, following separate reports of vessels being hit by projectiles within the waterway.

Although Middle Eastern crude exports have recovered significantly, the increase does not necessarily reflect higher overall production. Some of the additional supply represents oil being redirected to international markets rather than regional refineries. Gulf oil flows excluding Iran exceeded 81% of prewar levels in September, supported by a recovery in Saudi exports, while Iranian exports fell to zero amid a U.S. blockade.

Additional Russian diesel supplies could help ease pressure on global fuel markets, following an agreement announced by President Trump to allow more Russian diesel exports. However, continued uncertainty surrounding the volume and timing of those shipments may limit their ability to offset ongoing supply disruptions. The International Energy Agency reported that Russian crude production increased by 65,000 barrels per day in September to 8.43 million barrels per day, although output remained 870,000 barrels per day below year-earlier levels.

The IEA also reported that crude exports from Middle Eastern Gulf producers increased by 4.4 million barrels per day in September, reaching approximately 75% of prewar levels. Despite the recovery, renewed attacks on energy infrastructure and shipping routes continue to threaten the stability of global supplies.

Markets are also awaiting the latest U.S. inventory reports from the American Petroleum Institute and the Energy Information Administration. The reports are expected Wednesday and Thursday, respectively, following a one-day delay associated with Monday’s federal holiday.

• Where: The Gaylord Opryland Hotel
• Attending: Brian Baker (239.297.4519)
• 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