Oil prices rise after Houthi attacks on Riyadh

RIYADH: Global oil markets were jolted by the latest escalation in the Middle East after Yemen’s Iran-aligned Houthi movement launched missile and drone attacks toward Riyadh, raising fresh concerns over the security of energy supplies from the region.

The attacks came amid an ongoing standoff between the United States and Iran, adding another layer of uncertainty for investors already watching disruptions to oil flows across key regional shipping routes.

Oil prices initially moved higher following the attacks as traders assessed the potential impact on production, exports and transport infrastructure. Brent crude briefly climbed above $104 a barrel, while US West Texas Intermediate also traded above $101 a barrel in early market activity.

However, prices later eased as markets received indications that Saudi oil exports were recovering and that some supplies could continue reaching international buyers through alternative routes. Reuters reported that Brent and WTI were trading lower on Monday as investors also monitored diplomatic efforts aimed at reducing tensions.

The latest attacks have nevertheless kept geopolitical risk firmly in focus.

The Houthis have targeted Saudi Arabia as the wider regional conflict continues to affect energy infrastructure and shipping routes. Their recent attacks have included missile and drone strikes around Riyadh as well as strikes affecting the country’s oil infrastructure.

Saudi Arabia has been working to maintain crude exports despite disruptions. Reuters reported that Saudi exports had recovered to more than four million barrels per day in September, compared with about 2.4 million barrels per day in August.

The situation remains closely linked to the broader confrontation involving Iran and the United States. Continued uncertainty around the Strait of Hormuz and the Bab el-Mandeb shipping route has increased investor sensitivity to any new military escalation.

For oil markets, the immediate concern is whether the attacks remain isolated or develop into sustained disruption of production and transportation.

Analysts have warned that prolonged interruptions could place further pressure on global inventories and fuel prices. At the same time, improving Saudi export flows and hopes for diplomatic engagement have helped limit some of the market reaction.

With tensions still high, traders are expected to closely monitor developments in Saudi Arabia, Yemen and the wider Gulf region. Any fresh attack on energy infrastructure could quickly revive fears of supply shortages, while progress in diplomacy could ease the risk premium that has kept oil prices elevated.

For now, the market remains caught between two competing forces: geopolitical risks threatening supply and signs that producers are finding ways to keep crude flowing.