Brent crude futures rose 1.4%, to $99.33 a barrel by 0212 GMT, while U.S. West Texas Intermediate crude was at $94.34, up 1.4%.
Oil prices have climbed a quarter since early August as hopes for a permanent resolution to the six‑month‑old war faded and fighting flared again, with prices fast approaching the key $100‑a‑barrel mark.
The Middle East war intensified on Tuesday when Iranian‑backed Houthis in Yemen launched strikes on several Saudi cities, further embroiling a U.S. ally in the conflict. U.S. forces hit multiple Iranian oil tankers, and Iran targeted a U.S. base in Jordan.
“Recent developments only reinforce the view that we are still some way from a restart in (peace) talks. In the meantime, the market is likely to continue to price in a sizeable risk premium,” ING analysts said in a note.
The latest attacks threaten to deepen disruptions to Middle East oil supplies, already strained by strikes on regional energy infrastructure and key shipping lanes. While Saudi Arabia has diverted some exports away from the Strait of Hormuz, any sustained attacks on the kingdom could complicate efforts to keep crude flowing to global markets, analysts said.
“Iran’s attacks on Saudi energy facilities and the subsequent destruction of five Iranian tankers raised concerns about another prolonged disruption to oil supplies,” OCBC analysts said in a note.
With supply risks mounting, traders are pricing in a sizeable risk premium, keeping oil prices on an upward trajectory as the region’s instability continues to loom.
