New Delhi, Oct 28: Crude oil prices surged on Wednesday after Saudi Arabia’s largest oil refinery was reportedly struck by a missile launched by Yemen’s Iran-aligned Houthi group, reviving concerns over potential disruptions to global oil supplies amid continuing tensions in West Asia.
Brent crude futures for December delivery gained $1.55, or 1.36 per cent, to reach $115.43 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude rose 1.43 per cent to $101.32 a barrel, reflecting renewed concerns among market participants over the security of energy infrastructure in the region.
The reported strike added to uncertainty in international oil markets, with traders closely monitoring developments across the Middle East. The possibility of further disruptions to oil production, processing and transportation has remained a key concern as regional tensions continue to affect energy supply expectations.
The Houthis said they had targeted the Saudi oil refinery, bringing renewed attention to the vulnerability of major energy facilities in the region. However, Saudi authorities had not confirmed the reported strike on the facility, which has a processing capacity of 5.5 lakh barrels per day.
The increase in crude prices reversed part of the losses recorded during the previous trading session. Oil prices had fallen by nearly $2 a barrel on Tuesday as diplomatic efforts in the Middle East helped ease concerns about potential supply disruptions. Market sentiment had also been influenced by expectations of an increase in US crude inventories.
The latest price movement highlights how developments in the region can influence global energy markets, particularly when concerns arise over the security of major oil-producing countries and critical infrastructure.
Diplomatic Efforts Continue Amid Regional Tensions
Efforts to reduce tensions in West Asia have continued alongside concerns over energy supplies. A diplomatic meeting held in Tehran reportedly brought representatives from Saudi Arabia, Turkey and Pakistan together with Iranian officials to discuss ways to defuse regional tensions.
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According to reports, the four countries agreed to continue dialogue aimed at strengthening cooperation on peace and security. The discussions came as energy markets remained sensitive to developments that could affect oil production, exports and transportation through strategically important routes.
Although diplomatic engagement had helped ease some market concerns during the previous session, the reported attack on the Saudi refinery renewed uncertainty among investors. Traders continued to assess whether regional tensions could lead to further risks for crude supplies.
OPEC+ Output Decision in Focus
Meanwhile, OPEC+ producers are expected to leave their December oil output targets unchanged at a meeting scheduled for Sunday, according to multiple reports.
Output from most of the group’s seven core producers, including Saudi Arabia, Russia and Iraq, remains below their respective production targets. The expected decision is therefore being watched closely by market participants assessing the balance between global oil demand and available supplies.
Any developments affecting production levels among major oil-producing nations could influence price movements in the coming days. For now, the reported refinery strike has added another factor to the market outlook, alongside production decisions and diplomatic efforts to contain regional tensions.
Saudi Arabia remains one of the most important players in the global energy market. The country is the world’s second-largest crude oil producer and its biggest oil exporter, making developments affecting its energy infrastructure particularly significant for international oil prices.
Strait of Hormuz Remains a Key Supply Concern
The wider West Asian conflict has also placed pressure on the Strait of Hormuz, a vital maritime chokepoint for global energy shipments. Before hostilities began in February, the waterway handled approximately 20 per cent of global energy shipments.
The strategic importance of the strait means that any threat to shipping through the route can raise concerns about the movement of crude oil and other energy supplies to international markets. Disruptions in the area could have implications for import-dependent economies and industries that rely heavily on petroleum products.
Energy markets have remained on edge following Iranian attacks on oil tankers near the strait. Those incidents pushed Brent crude prices above $117 a barrel last week, marking their highest level since April.
Brent briefly tested the $117 mark again on Monday before settling lower. The latest increase following the reported strike on the Saudi refinery has once again placed attention on the risks facing oil supplies across the region.
With diplomatic discussions continuing and OPEC+ output decisions approaching, traders are expected to remain attentive to developments affecting crude production, shipping routes and the security of energy infrastructure.
The latest rise in oil prices underscores the sensitivity of global energy markets to geopolitical developments, particularly in West Asia, where major oil producers and important maritime routes play a central role in international supply chains. (IANS)
