The price of Brent crude oil, after a decline yesterday, has once again risen above $100 per barrel and is currently trading at $101.49. This price change has occurred in response to new reports regarding Houthi attacks on Saudi Arabia's energy infrastructure.
Attacks on Saudi Energy Infrastructure
While Saudi Energy Minister Prince Abdulaziz bin Salman announced that the country's oil flow through east-west pipelines has reached 5.8 million barrels per day, the Houthi attacks on two Saudi airports, including Jazan Airport, which is home to a refinery with a capacity of 400,000 barrels per day operated by Aramco, have raised security concerns in the region.
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Impact of Attacks on the Oil Market
These attacks have raised concerns about the security situation in the Middle East, even with the improvement in crude oil flow and other products. According to Vitol reports, about 12 million barrels of crude oil are exported daily from the Persian Gulf, along with 2 million barrels of fuel. Commodity analysts at ING have noted that the oil market is currently struggling between improved supply and persistent threats to supply.
It is clear that the only way to achieve sustainable price reductions is to address the enduring risks. As long as conflicts continue, the potential for oil price increases will remain, regardless of reports regarding export volumes. Traders are now paying closer attention to the logistical details of oil transport from the Persian Gulf, which has become increasingly complicated and has driven transportation costs to unimaginable levels.
The rates for large oil tankers have exceeded one million dollars per day, and this cost increase has now spread to smaller vessels as well. Senior oil market analyst at Sparta Commodity, June Gu, warned about this situation last week.
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