Crude oil prices surged on Thursday, September 10, with Brent crude climbing above $105 a barrel, as escalating attacks and disruptions across key Middle East shipping routes intensified concerns over global oil supplies.
Iran-backed Houthi militants have of Mocha, three Yemeni government sources told Reuters. The move brings the Houthis closer to the strategic Bab el-Mandeb Strait, the sources said.
This poses a fresh threat to shipping through the strategically important Bab el-Mandeb Strait, while tanker attacks have intensified in the region and traffic through the Strait of Hormuz remains restricted.
International benchmark Brent crude rose nearly $5 to around $106 a barrel, hitting its highest level since May 22 and extending its gains for a fifth consecutive session. US benchmark West Texas Intermediate (WTI) crude jumped $4.50 per barrel to $95.39 a barrel.
The latest surge comes after Brent crude crossed the $100 mark earlier this week as oil tankers came under renewed attack in the Persian Gulf. Rising fuel costs are also stoking inflation concerns and increasing pressure on consumers, adding to market fears over the economic impact of prolonged disruptions to oil supplies.
Crude oil prices have remained highly volatile since Israel and the United States initiated a war with Iran more than six months ago. The conflict has disrupted shipping through the Strait of Hormuz, a narrow waterway through which around a fifth of the world’s oil supply passed before the war began.
Why has Saudi Arabia’s oil production plunged?
Separate from the disruptions around the Red Sea and Strait of Hormuz, Saudi Arabia has reported a sharp decline in crude oil production.
Riyadh notified OPEC’s secretariat that its output tumbled by 1.9 million barrels a day to 6.238 million barrels a day, according to a monthly report from the organisation obtained by Bloomberg.
That is even lower than the previous wartime nadir reached in April and marks the lowest production figure reported by Saudi Arabia since the beginning of the Gulf War.
The production slump reported by Riyadh is directionally consistent with provisional tanker-tracking data compiled by Bloomberg, which indicated that Saudi crude exports fell by about a third in August to roughly 3 million barrels a day.
How have Middle East tensions affected oil prices?
The latest supply concerns follow months of sharp swings in crude prices. Brent crude rose from around $70 to $120 a barrel for much of March, April and May.
In July, prices again swung between $72 and $102 a barrel, reflecting shifting expectations that the United States and Iran could reach an agreement that would allow stranded tankers to safely move oil out of the Persian Gulf.
Meanwhile, Iran reportedly said it had attacked 10 ships near the Strait of Hormuz on Wednesday after the US hit five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks, as per the Reuters report.
Iran earlier said it was prepared for a more intense war following the latest escalation in hostilities.
US President Donald Trump warned that the US may hit Iran’s Pickaxe Mountain, located near its heavily damaged Natanz uranium enrichment facility, and said the war would likely last beyond the November midterm elections.
What does OPEC’s latest oil outlook show?
Meanwhile, OPEC on Thursday lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, a copy of its monthly report showed, marking the fifth straight downward revision.
OPEC’s oil output also fell by 640,000 barrels per day in August, a Reuters survey found, as Saudi exports faced new disruptions due to the war in Iran and a US blockade cut Iran’s shipments, according to the Reuters report.
While the US and Iran continue to clash over control of the Strait of Hormuz, US Treasury Secretary Scott Bessent earlier this month said the key waterway could lose much of its importance within two years as oil pipelines provide alternative routes for Persian Gulf energy shipments.
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