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Global oil prices surged more than 3 per cent on Thursday, reaching their highest level in five months amid fears of renewed conflict in the Middle East, attacks on vessels in the Strait of Hormuz and Houthi strikes on Saudi Arabia’s oil infrastructure.
Analysts warned that crude prices could remain elevated in the near future as prospects for easing regional tensions appeared increasingly slim.
According to Reuters, Brent crude futures rose by $3.35, or 3.08 per cent, to $112.17 a barrel on Thursday, the highest level since 18 May.
US West Texas Intermediate (WTI) crude also gained $2.68, or 2.76 per cent, to reach $99.83 a barrel.
Tamas Varga, an analyst at PVM Oil Associates, said efforts to ease tensions in Ukraine and the Middle East were losing credibility.
“Attacks on vessels in the Strait of Hormuz and Houthi attacks on Saudi Arabia and its oil infrastructure have raised fresh concerns. Reports that more oil was being exported from the Middle East than before the conflict have been completely overshadowed,” he said.
Varga added that there appeared to be little prospect of the conflicts easing before the US midterm elections, suggesting oil prices could remain high in the near term.
Meanwhile, analysts at Morgan Stanley said in a note that around 17 million barrels of crude oil a day had been exported from the Middle East last week.
Amid deteriorating security conditions in the region, the United States has also taken precautionary measures regarding its diplomatic presence in Saudi Arabia. Citing US officials, Reuters reported that the US State Department had ordered some diplomats and their family members to leave the country. Washington was also planning to withdraw family members of diplomats from several other US missions in the Middle East.
On Wednesday, Yemen’s Iran-backed Houthi group attacked several targets in Saudi Arabia. At least two people were killed and several others injured when an attack hit a civilian airport in Dammam. Two more people were reportedly killed in a drone strike on a Saudi oilfield.
Meanwhile, Iranian media reported hearing explosions in the southern Iranian city of Sirik on Wednesday. Details about the nature and source of the explosions were not immediately available.
Iran’s Islamic Revolutionary Guard Corps (IRGC) has also issued a stern warning over commercial shipping through the Strait of Hormuz. In a new message, it said US military bases in the Middle East would again be targeted if any commercial vessel attempted to cross the strategic waterway with US military assistance without the IRGC’s permission.
The combination of escalating regional conflict, security risks along a vital shipping route and threats to oil infrastructure has heightened uncertainty in global energy markets. Analysts warn that oil prices could continue to rise unless the situation improves swiftly.