Oil prices remained near five-month highs on Tuesday as escalating Middle East tensions raised fresh concerns about global energy supplies. Traders weighed renewed attacks on shipping routes and Saudi Arabian energy facilities against recovering Persian Gulf oil shipments and the possibility of easing US sanctions on Russian energy exports.
Brent crude futures advanced 0.4% to $109.97 per barrel by 01:40 ET (05:40 GMT). Meanwhile, the more actively traded December West Texas Intermediate (WTI) futures contract gained 0.3% to $98.80 per barrel.
Brent had climbed to $110.70 during the previous session, its highest level since May 20. The international oil benchmark has surged nearly 80% this year as geopolitical conflicts in the Middle East and the ongoing Russia-Ukraine war disrupted global energy supplies.
Strait of Hormuz Tensions Threaten Global Oil Supplies
The Strait of Hormuz remains a major source of uncertainty for global energy markets as tensions involving Iran continue to escalate.
Iran’s First Vice President Mohammad Reza Aref said Tehran needed to assert control over the strategic waterway to safeguard its national security.
Speaking during a meeting with Russian Prime Minister Mikhail Mishustin in Tajikistan, Aref blamed the United States for the ongoing crisis and argued that Washington should bear responsibility for its consequences.
He also indicated that Iran could guarantee safe passage through the strait for countries it considers friendly.
The remarks reinforced concerns about potential disruptions to one of the world’s most important maritime oil transportation routes.
Any prolonged restrictions on shipping through the Strait of Hormuz could affect global crude exports, increase transportation costs and intensify pressure on international oil prices.
Persian Gulf Oil Shipments Recover but Remain Vulnerable
Despite renewed geopolitical tensions, some improvement in regional crude oil shipments has provided limited relief to energy markets.
US Energy Secretary Chris Wright said oil flows from the Persian Gulf had recovered to approximately 80% of their levels before the conflict.
However, shipments of refined petroleum products remained constrained, suggesting that regional supply chains had not fully recovered.
Analysts at ANZ warned that the improvement in crude shipments could be threatened by another escalation in military activity.
According to the bank, the recovery gained momentum during the second week of October. Nevertheless, preliminary shipping data indicated that flows might be slowing again as attacks intensified.
The uncertainty has complicated expectations for a sustained recovery in Middle Eastern energy exports.
Iran Reports Tanker Incident in Strait of Hormuz
Additional concerns emerged after Iran’s Revolutionary Guard claimed that an oil tanker had struck a naval mine while travelling through the Strait of Hormuz.
According to the Iranian account, the vessel subsequently caught fire.
However, the reported incident could not be independently verified.
The National reported that the tanker had allegedly been travelling through an unauthorised shipping route.
It also remained unclear whether the incident was connected to a US-backed maritime corridor established along Oman’s coastline.
The unconfirmed reports added to market uncertainty surrounding shipping safety and the potential risks facing commercial vessels in the region.
Houthi Attacks Raise Concerns Over Saudi Energy Infrastructure
Tensions intensified further after Yemen’s Iran-backed Houthi movement claimed responsibility for several attacks targeting Saudi Arabian infrastructure.
The group said its operations targeted energy facilities, military installations and transportation infrastructure.
Among the reported targets were a Saudi Aramco facility in Yanbu and the Shaybah oilfield.
The Houthis also claimed attacks involving King Khalid International Airport in Riyadh and Abha International Airport.
The claims raised concerns about the security of Saudi Arabia’s energy infrastructure, although the extent of any damage or disruption was not independently established in the report.
Saudi Arabia remains one of the world’s leading crude oil producers and exporters. Consequently, threats to its production facilities or transportation networks can have significant implications for international energy markets.
Further attacks could complicate efforts to restore regional oil shipments and maintain stable global supplies.
US Sanctions Relief Could Increase Russian Oil Exports
While Middle East tensions supported crude prices, potential changes to US sanctions on Russian energy introduced a counterbalancing influence.
President Donald Trump’s executive order waiving certain Russia-related sanctions and tariffs raised expectations that additional Russian oil could eventually reach international markets.
Easing restrictions on Russian energy exports could help reduce global supply pressure, particularly if disruptions in the Middle East continue.
However, the US administration has not reached a final decision regarding the broader sanctions policy.
Furthermore, Russia’s ability to significantly increase exports remains uncertain.
Russian crude oil production rose slightly in September but remained substantially below levels recorded a year earlier.
This suggests that any additional Russian supply might be insufficient to fully compensate for disruptions affecting Middle Eastern oil producers.
Oil Price Outlook: Can Crude Maintain Its Rally?
The outlook for oil prices remains heavily influenced by geopolitical developments and the pace of supply recovery in the Persian Gulf.
Brent crude’s advance toward five-month highs reflects continued concerns about shipping security, Saudi energy infrastructure and the possibility of renewed disruptions around the Strait of Hormuz.
Although regional crude shipments have recovered to approximately 80% of prewar levels, recent attacks threaten to undermine that progress.
Meanwhile, the prospect of easing US restrictions on Russian energy could provide some relief to global supply conditions.
Investors will closely monitor developments involving Iran, Houthi military operations, Persian Gulf shipping activity and Washington’s sanctions policy.
For now, oil prices remain elevated as traders assess whether improving supply conditions can offset the risks posed by renewed Middle East hostilities.
