Crude oil rose to $101.51 on October 7 as traders weighed supply disruptions from a storm and regional attacks. Brent futures gained 93 cents while WTI crude rose 90 cents. US forecasters said a storm in the Gulf of Mexico could affect production facilities, keeping oil prices high for now.
Oil prices rose on Wednesday as traders weighed potential supply disruptions from a storm moving towards US oil-producing areas and attacks by Yemen's Iran-backed Houthis on Saudi Arabia against rising shipments of Middle East crude.
US forecasters said on Tuesday that a storm developing in the Gulf of Mexico was expected to become the first Atlantic hurricane of 2026 within two days and could affect oil and gas production facilities. The offshore areas in the storm's projected path account for 15% of US crude oil output and 5% of the country's natural gas production.
Crude oil price on October 7Brent futures gained 93 cents, or 0.92%, to $101.51, while US West Texas Intermediate (WTI) crude rose 90 cents, or 1.01%, to $90.30 a barrel.
Meanwhile, oil supplies have been increasing, with the East-West pipeline reaching 5.8 million barrels a day, Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday. Around 12 million barrels per day of crude oil and 2 million bpd of refined products have been shipped out of the Middle East by tankers over the past 7 to 10 days, according to Reuters.
At the same time, tensions in the region have intensified. Saudi Arabia's airports in Jazan and Najran were targeted in two attacks on Monday evening, the Saudi aviation authority said, as fighting between the kingdom and Yemen's Iran-backed Houthis escalated. The attacks came as Saudi-backed Yemeni government forces stepped up a major offensive to reclaim territory from the Houthis following weeks of rebel advances, with Riyadh increasing airstrikes in support of the campaign.
Attacks and refinery outages are likely to keep the cracks elevated and scarcity will transmit to crude. US-Iran relations also showed little sign of improving. US President Donald Trump said on Tuesday that nobody knew who was running Iran during the eight-month US-Israeli war with Iran.
"Their leaders are gone, their second group of leaders are gone, and the biggest problem I have is nobody knows who the hell is running the country," Trump said. Iran's foreign ministry spokesman, however, said on Sunday that Washington knows very well who its counterpart is in Iran and understands how the country's decision-making system works.
Where are prices headed?JPMorgan analysts said the outcome of the conflict remained difficult to assess, noting that there was uncertainty over how the situation could develop. When the war began, the bank had assumed that there were economic thresholds the US administration would not cross. Six months into the conflict, JPMorgan said several of those thresholds had been crossed, while there was still no clear exit strategy.
The risk of further supply disruptions has also increased the possibility of higher oil prices. Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks had shown that disruptions to shipping could spread and become more severe.
Goldman Sachs has outlined a scenario in which oil prices could rise to as much as $120 a barrel if attacks on vessels in the Middle East intensify. If exports return to normal, the bank expects oil prices to move back towards $80 a barrel.
Struyven told Bloomberg that shipping risks had become a key driver of oil prices. Goldman Sachs sees meaningful upside to crude prices and also expects natural gas and refined product prices to rise. Struyven said supply shocks in gas and fuels are larger than those in the crude market.