Oil prices have experienced volatility, rising due to Middle East attacks and falling as investors assess supply disruptions against the potential for more Russian diesel entering global markets. Brent recently traded below US$106 a barrel, while West Texas Intermediate remained near US$93. Meanwhile, European gas prices have hovered near a four-year high, Asian shares were mixed, and European stock futures edged lower.
Regional tensions have escalated with a surge in Iranian attacks on ships and tankers crossing the Strait of Hormuz. Additionally, the Houthis and Saudi Arabia have traded attacks, and Saudi Arabia’s Energy Ministry reported that a Saudi Aramco building in Dhahran was targeted Tuesday evening. These developments have increased uncertainty regarding energy flows from the Persian Gulf.
These flare-ups, alongside attacks from Russia, threaten a supply recovery that had only recently returned to near pre-war levels. Despite these risks, a group of oil-rich countries has raised its forecast for next year’s demand growth, driven in part by the need to replenish oil inventories.