Oil Prices Rise Above $110 as Middle East Tensions Threaten Supply

Oil prices climbed on Thursday as renewed attacks in Saudi Arabia heightened concerns over Middle East security and global crude supplies. The United States has ordered some diplomats and family members to leave its missions in Saudi Arabia amid the escalating tensions.

Brent crude futures rose $1.29, or 1.2%, to $110.11 a barrel. US West Texas Intermediate (WTI) crude gained 97 cents, or 1%, to $98.12.

Brent settled largely unchanged on Wednesday, while WTI fell 67 cents. Thursday’s gains reflected growing concerns about potential supply disruptions across the region.

Saudi Attacks Raise Supply Concerns

The US State Department plans to withdraw family members from several American missions in the region, US officials told Reuters.

The latest security concerns followed attacks attributed to Yemen’s Houthi movement on Wednesday. An attack on a civilian airport in Dammam, Saudi Arabia, killed one person and injured eight others, according to the supplied report.

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A separate drone attack on a Saudi oil field killed two people. These incidents have raised concerns about the safety of regional energy infrastructure.

Explosions were also reported in Sirik, southern Iran, on Wednesday. Iranian media said the cause and origin of the explosions remained unknown.

Iran Warns Against Blockade and Threats

Iranian Foreign Minister Abbas Araghchi told the Financial Times on Wednesday that Tehran was fully prepared to defend itself.

President Masoud Pezeshkian also told state media that the United States could not expect dialogue while maintaining a blockade and threatening Iran.

Meanwhile, shipping risks remain a major concern for energy markets. Kpler data showed at least 18 attacks on shipping over the previous two weeks.

LSEG analysts warned that Iran was targeting tankers beyond the Strait of Hormuz, extending the risk into the Gulf of Oman. Such threats could disrupt crude loading operations and ship-to-ship transfers that support regional oil exports.

US Crude Inventories Fall More Than Expected

US crude inventories declined by 3.06 million barrels last week to 412.5 million barrels, according to the Energy Information Administration (EIA).

The decline exceeded analysts’ expectations. A Reuters poll had forecast a draw of 820,000 barrels.

However, distillate inventories moved in the opposite direction. Stocks of diesel and heating oil rose by 1.68 million barrels to 104.3 million barrels. Analysts had expected a decline of 1.16 million barrels.

The Trump administration is also offering to lend up to nearly one-third of the US emergency heating oil reserve, the Department of Energy said on Wednesday.

The move aims to contain prices that have risen amid diesel shortages linked to the conflicts involving Iran and Ukraine.

Russia and Ukraine Peace Talks Continue

Separately, Russian President Vladimir Putin hosted US Special Envoy Steve Witkoff in St Petersburg on Wednesday. Their talks focused on efforts to end the war in Ukraine.

The Kremlin said Putin had agreed to resume US-mediated peace talks with Ukraine as soon as next month. Ukrainian President Volodymyr Zelenskiy welcomed the prospect and said he hoped discussions would begin promptly.

Developments in the Middle East and Ukraine continue to shape the outlook for global energy markets. Traders are monitoring security threats, oil inventories and diplomatic efforts for signs of changes in supply and demand.