Brent crude oil prices reached $112.33 per barrel on Thursday, indicating a 3.2% increase. This price rise occurred after Houthi attacks on Saudi Arabia and concerns about disruptions in energy supply from one of the key oil-exporting regions.
Increase in Global Oil Market Prices
The price of West Texas Intermediate crude also increased by $2.14 (2.2%) to $99.29. This price surge is a result of heightened concerns regarding crude oil supply in the Middle East, where Saudi Aramco, symbol 2223.SE, has instructed its employees to evacuate its headquarters in Dhahran.
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Dhahran, located on the shores of the Persian Gulf and near Bahrain, is recognized as one of the main oil production centers. Ongoing conflicts between the Houthis and the Saudi-led coalition have intensified, especially following this group's advance towards Bab al-Mandab. This area is considered a crucial chokepoint for shipping at the entrance to the Red Sea due to its geographical position.
Impacts on Crude Oil Exports and Refineries
Analysts at Morgan Stanley estimate that crude oil exports from the Middle East were about 17 million barrels per day last week. Meanwhile, data from Kpler shows that crude oil exports from the region averaged around 18 million barrels per day in the 12 months prior to the outbreak of the Iran war.
In the United States, Valero Energy refinery, symbol VLO.N, achieved its highest quarterly profit, exceeding Wall Street expectations. Disruptions caused by Middle Eastern conflicts have increased refining margins in the third quarter. Valero's performance reflects the impact of regional tensions on the refining sector and the global petroleum products market.
Overall, the rise in oil prices and concerns about supply indicate the profound effects of Middle Eastern conflicts on the global energy market. These developments could have wide-ranging implications for the global economy and oil-dependent industries.
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