Brent crude oil price jumps to $112 after Saudi Arabia attacks
Web StoryWatch this story in 15 seconds →Key takeaways
- Brent crude rose above $112 a barrel on Thursday, up more than 3%.
- Houthi drone strikes on Saudi Arabia triggered the jump.
- Shipping attacks and low US stockpiles add more pressure on prices.
Brent crude oil jumped above $112 a barrel on Thursday. The price rose more than 3% after deadly Houthi attacks in Saudi Arabia. The strikes raised fresh fears about oil supplies from the Gulf.
Brent crude is the global benchmark for oil prices. When it moves, fuel costs around the world often follow. The US version, called WTI, moved toward $99 a barrel on the same day.
What happened
Yemen's Houthi militants hit several targets in Saudi Arabia on Wednesday. One strike hit a civilian airport in Dammam. At least one person died and eight were hurt, according to Reuters.
A separate drone attack struck a Saudi oil field. Two people were killed, Reuters reported.
CNBC TV18 named the site as Saudi Aramco's Shaybah field. It said operations at the site were not hurt. But traders still grew nervous.
The United States responded by pulling people out. Washington ordered some diplomats and family members to leave its missions in Saudi Arabia.
US officials told Reuters more family members will leave. Other US missions in the region face the same order.
Explosions were also heard in Sirik in southern Iran. Iranian media reported the blasts on Wednesday. The cause of the blasts was not clear, Reuters said.
Attacks on ships are rising too. Kpler data showed at least 18 attacks on shipping in the past two weeks.
LSEG analysts warned that Iran is now targeting tankers beyond the Strait of Hormuz. They said ships in the Gulf of Oman face risk as well.
These routes matter. The Gulf supplies a large share of the world's oil.
When tankers face danger, oil buyers pay more to cover the risk.
US stockpiles also added to the pressure. The US Energy Information Administration said crude stocks fell by 3.06 million barrels last week. That left 412.5 million barrels.
Analysts had expected a much smaller drop of 820,000 barrels, Reuters reported.
The Trump administration is offering to loan out oil from its reserves. It would release up to nearly a third of its 1-million-barrel emergency heating oil reserve. The goal is to contain prices that have surged on diesel shortages.
Why it matters
This jump extends a sharp run for oil. Brent has gained more than 80% this year, The Statesman reported. The main driver is the US-Iran war.
It has disrupted flows from the Arabian Gulf for nearly nine months.
A rising oil price hits daily life fast. Diesel and heating oil have climbed even faster than crude.
The Federal Reserve has already warned about diesel prices feeding into inflation. When transport costs rise, the CPI inflation report often follows with higher numbers.
Rising inflation eats into savings interest. That hurts household budgets.
Companies feel it too. Stock markets track oil earnings closely. Airlines, shipping firms, and delivery services pay more for fuel.
Some pass the cost to customers. That can push prices up across the economy.
Governments are feeling the strain. CNBC TV18 reported that refined products have climbed faster than crude. Diesel is rising the most.
Ukrainian attacks on Russian refineries have tightened the market further.
India shows how importers cope. India buys most of its oil from abroad. On Thursday, petrol and diesel prices in Indian cities stayed unchanged.
But BusinessToday said sustained high prices could raise fuel import costs. Oil marketing firms feel the squeeze first.
What happens next
Traders will watch for more strikes. The Houthis have hit Saudi targets many times. Each new attack can push prices higher.
Calm days may let prices cool. But the risk premium is likely to stay.
The New York Times reported a bigger risk ahead. It said the US and Israel have drawn up plans for fresh strikes against Iran.
The strikes could come after next month's US midterm elections. The newspaper cited US officials briefed on the plans. Such action would shake oil markets hard.
Shipping routes are the other key watch. Iran has stepped up attacks on ships in the Strait of Hormuz. Houthis keep targeting Saudi Arabia.
If a tanker route closes, prices can spike fast. The Statesman noted that some tankers now switch off tracking transponders to avoid detection.
One relief valve may open soon. Russia is sending diesel to the United States.
Deputy Prime Minister Alexander Novak said a tanker would sail on Thursday. The ship could carry 40,000 metric tons of diesel, or about 300,000 barrels.
US politics adds another twist. President Trump wants prices down before the midterms. CNBC TV18 said he is pushing measures to cut costs.
The reserve loan is one of them. If it works, price rises may slow.
For now, the market stays on edge. Brent above $112 is far above where the year began. Until the conflict cools, buyers should expect sharp price swings.
This article is for information only and is not financial advice.
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