Crude oil prices are currently rising steadily due to concerns stemming from increasing tensions in the Middle East and Houthi attacks on Saudi Arabia's infrastructure. As of the writing of this report, Brent oil prices have reached $116.56 and West Texas Intermediate (WTI) prices have reached $103.35 per barrel. This price increase indicates a four-month upward trend driven by political and military uncertainties in the region.
Impact of Political Tensions on the Oil Market
The U.S. midterm elections, scheduled for November 3, have also fueled these concerns. Former U.S. President Donald Trump has repeatedly indicated that the United States may resume airstrikes on Iran after the elections. These statements, along with media reports of coordination between the United States and Israel for these attacks, have strengthened expectations for a return to hostilities.
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Upward Trend in Oil Prices and Houthi Attacks
According to reports, Brent oil prices have increased by 11% this month, while WTI prices have risen by 14%. Since the end of June, Brent oil prices have increased by more than $40 per barrel and WTI prices by more than $34 per barrel. Meanwhile, reports of attacks on tankers in the Strait of Hormuz are continuously emerging, contributing to a positive sentiment in the oil market. Additionally, new reports about Houthi attacks on Saudi oil facilities have reinforced this sentiment.
According to MST Marquee's energy research director, Saul Kavonic, "Ongoing kinetic operations around the Strait of Hormuz, along with doubts about existing diplomatic pathways, have kept oil prices high in anticipation of escalating conflicts in the coming weeks." These concerns come against the backdrop of ongoing reports about the recovery of oil flows from the Persian Gulf.
Saxo Bank's commodity strategy director, Ole Hansen, also stated last week that "currently, oil exports from this region appear relatively resilient, made possible by alternative routes and logistical arrangements. However, the market is increasingly worried that further attacks may damage production, processing, or export infrastructure, leading to disruptions that cannot be easily resolved by rerouting shipments."
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