Brent crude jumps above $111 after Houthi strikes on Saudi Arabia

The attacks struck Saudi Aramco’s Shaybah oilfield and an international airport in Dammam, with the drone strike on Shaybah reportedly killing two people. The US government responded by ordering non-emergency personnel and their families to leave Saudi Arabia, reinforcing a sense that the security situation in the kingdom is deteriorating.

Iranian state media separately reported explosions in southern Iran without giving further details on their cause. Tensions with Tehran also showed little sign of easing: Iranian Foreign Minister Abbas Araqchi wrote in the Financial Times that Iran has “no trust whatsoever” in Washington’s stated desire for peace, citing past instances where the US struck Iran during nuclear negotiations. Iranian President Masoud Pezeshkian said talks cannot move forward while US sanctions and threats against Iran remain in place.

Not all the news was negative for supply. ING commodity analysts Warren Patterson and Ewa Manthey noted that Kuwait Petroleum Corp’s chief executive said the country is now producing more than 2 million barrels a day, matching pre-war export levels, even as shipments of refined products stay well below previous norms.

Adding to the upward pressure, US crude inventories fell by 3.06 million barrels last week, alongside a further 300,000-barrel drawdown in the Strategic Petroleum Reserve, partly reflecting lingering effects of hurricane disruption on Gulf of Mexico output.

Persistent attacks on Saudi energy infrastructure and the prospect of a prolonged standoff with Iran keep a geopolitical risk premium embedded in oil prices. Higher Brent crude and WTI crude levels can feed through to fuel costs, inflation expectations, and risk sentiment across equity and currency markets, particularly for oil-importing economies and energy-linked currencies.

Sources: OilPrice.com; Report.az (business); FXStreet