Oil Prices Rise as Strait of Hormuz Attacks Heighten Supply Fears

Oil prices rose on Wednesday after two vessels came under attack in the Strait of Hormuz. Iranian officials also told Reuters that Tehran had adopted new tactics to target ships, raising fresh concerns about global energy supplies.

Brent crude futures gained 63 cents, or 0.6%, to $106.32 a barrel by 0345 GMT. US West Texas Intermediate (WTI) crude rose 66 cents, or 0.7%, to $94.80. Both benchmarks had gained more than $1 earlier before trimming their advances.

Strait of Hormuz Attacks Raise Oil Market Concerns

Iranian officials declined to explain their new strategy in detail. However, one official told Reuters that Iran had begun using different offensive tactics against vessels it considered to be violating its restrictions about 10 days earlier. The official said attacks on those ships had increased since then.

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The United Kingdom Maritime Trade Operations (UKMTO) reported on Tuesday that unknown projectiles had struck a container ship and a tanker inside the Strait of Hormuz.

Market analysts warned that further attacks could intensify concerns about supply disruptions and keep oil prices elevated.

Priyanka Sachdeva, head of market insights at Phillip Nova, said Iran understood the strategic importance of its location and the economic impact of higher oil prices. She also argued that Tehran could use this leverage amid efforts to reach a diplomatic settlement.

Houthi Attack on Saudi Aramco Adds to Supply Fears

Elsewhere, Saudi Arabia’s energy ministry said Iran-allied Houthi forces had attacked an administrative building belonging to state-owned oil company Saudi Aramco in Dhahran. The strike caused a limited fire, according to the ministry.

The Houthis have launched ballistic missiles and drones at Saudi Arabia over the past week. They describe the attacks as retaliation for Riyadh’s support of Yemeni government forces.

The supplied report also said an earlier strike on Saturday killed 13 people and that Riyadh’s international airport had been hit four times.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said concerns about supply disruptions linked to the conflict between the Houthis and Saudi Arabia were pushing oil prices higher.

However, he expected increased Russian diesel exports to ease some market tightness. Kikukawa projected WTI crude to trade between $90 and $100 a barrel.

OPEC+ Production and Russian Diesel Exports

Saudi Arabia increased oil production last month despite shipping disruptions linked to the US-Iran war. The move contributed to a sharp rise in output across OPEC+, the group comprising the Organisation of the Petroleum Exporting Countries and partner producers, including Russia, according to figures cited by OPEC on Tuesday.

Meanwhile, the Russian government said it saw no direct connection between peace talks with Ukraine and its agreement to export diesel to the United States.

For oil markets, the competing pressures remain significant. Security risks around the Strait of Hormuz could threaten supply flows, while higher production and additional diesel exports may help limit further price increases.