Global Oil Prices Rise Amid Middle East Tensions and Security Threats to Energy Routes

Global Oil Prices Rise Amid Middle East Tensions and Security Threats to Energy Routes

Global oil prices rose on Wednesday amid escalating tensions in the Middle East, concerns over disruptions to oil supplies, and growing security threats to commercial shipping and oil facilities in Saudi Arabia.

Reuters reported on October 21 that Brent crude futures rose by $1.59, or 1.5 percent, to $110.38 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude increased by $1.36, or 1.4 percent, to $99.18 per barrel.

According to the report, rising security risks along key maritime routes in the Middle East, particularly the Strait of Hormuz, the Gulf of Oman, and the Red Sea, have heightened traders’ concerns about the continued transportation of oil. Ship-tracking company Kpler reported at least 18 attacks on vessels over the past two weeks. Meanwhile, Yemen’s Houthi group claimed to have targeted energy facilities and other sites in Saudi Arabia.

The decline in US crude oil inventories has also supported rising prices. According to data from the American Petroleum Institute (API), US crude oil inventories fell by approximately 4.9 million barrels in the week ending October 16.

Suvro Sarkar, head of the energy sector research team at DBS Bank, said oil prices had experienced significant volatility during recent trading sessions. He attributed the fluctuations partly to profit-taking by traders and hopes for a potential agreement mediated by Qatar or Pakistan, as well as difficulties in reaching such an agreement and declining US oil inventories.

Energy market analysts have warned that continued insecurity along oil transportation routes could increase shipping and insurance costs, putting further upward pressure on global oil and fuel prices.