WTI rises above $94.00 amid escalating Middle East hostilities, supply risks

• Houthi attacks on Saudi Aramco headquarters and Riyadh airport raised severe regional supply disruption fears.

• Tehran intensified attacks on Strait of Hormuz tankers, though US naval efforts helped secure passing shipments.

• OPEC+ September production surged by 900,000 bpd, driven by a sharp 2 million bpd rise from Saudi Arabia.

West Texas Intermediate (WTI) oil price extends its gains for the fifth consecutive day, trading around $94.30 per barrel during Asian hours on Wednesday. Crude oil prices surged as escalating hostilities between Saudi Arabia and Iran-backed Houthi rebels heightened fears of Middle East supply disruptions.

Yemen’s Houthi militants launched a missile attack on Tuesday, striking Saudi Aramco’s headquarters in Dhahran, sparking a fire within part of the complex. This followed a weekend rebel attack targeting Riyadh’s main airport, as well as a new offensive by a Saudi-led coalition aiming to retake rebel-controlled territory in Yemen.

Meanwhile, regional tensions continued to mount around critical shipping lanes as Tehran intensified attacks on tankers transiting the Strait of Hormuz. Despite these threats, the United States reported that it helped facilitate the safe passage of over 19 million barrels of crude through the strategic waterway.

Despite ongoing shipping disruptions in the Strait of Hormuz, OPEC+, the alliance comprising the Organization of the Petroleum Exporting Countries members and allies like Russia, posted a sharp gain in oil production for September. According to OPEC's monthly report released Tuesday, it pumped an average of 39.07 million barrels per day (bpd) in September, representing an increase of roughly 900,000 bpd from August. This rise was largely driven by top producer Saudi Arabia, which reported pumping 8.372 million bpd in September, a jump of more than 2 million bpd compared to the previous month.

Moreover, markets held out hope that the US-Russia diesel agreement could free up additional supplies from Moscow. However, the Kremlin stated it saw no direct link between the Russian diesel export deal and its stance on Ukraine peace talks. The official comment addressed a Reuters report suggesting US envoys had informed Ukrainian officials that permitting Russian diesel exports was part of an effort to draw Moscow back to the negotiating table for a potential peace settlement.

Energy complex stays firm as geopolitical risks intensify

According to TD Securities, “strength across the energy market is hard to shake as tanker attacks escalate,” underscoring the resilience of the broader oil complex even as shipping risks mount and regional tensions remain elevated.