- Oil prices rose as Iran deployed new tactics to target ships amid escalating Middle East tensions.
- Brent crude climbed to $106.60 per barrel, while WTI reached a two-week high of $95.79.
- Meanwhile, shipping attacks around the Strait of Hormuz heightened concerns about global oil supplies.
- The IEA warned that limited Russian refinery capacity could prolong global diesel market tightness.
Oil prices rose on Wednesday as escalating Middle East attacks heightened concerns about global crude supplies. Meanwhile, Iranian officials revealed plans to target ships using new tactics to keep oil prices high.
Brent crude futures gained 91 cents, or 0.9%, to $106.60 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude climbed $1.65, or 1.8%, to $95.79. Consequently, WTI reached its highest level in more than two weeks.
According to market analysts, attacks on ships crossing the Strait of Hormuz continued to support oil prices. In addition, military strikes involving Saudi Arabia and the Houthis heightened concerns about regional oil exports. However, exports had remained stable despite the escalating tensions.
Iranian officials declined to disclose details of their new strategy. Nevertheless, one official said Iran had begun using different offensive tactics about 10 days earlier.
Attacks Heighten Shipping Risks
On Wednesday, the Iran-allied Houthis attacked an administrative building belonging to Saudi Aramco in Dhahran. Saudi Arabia’s energy ministry confirmed that the attack caused a limited fire. The incident adds to recent regional hostilities and further raises concerns about energy infrastructure security.
Meanwhile, a container ship sank south of the Strait of Hormuz after striking a naval mine and catching fire. Iran’s Revolutionary Guards Navy announced the incident through state media.
Additionally, the United Kingdom Maritime Trade Operations reported attacks on a container ship and a tanker. Unknown projectiles struck both vessels within the strait a day earlier.
Consequently, repeated attacks have intensified concerns about shipping disruptions along a critical global energy route.
Diesel Supply Risks Persist
Meanwhile, expectations of increased Russian diesel exports could limit further market volatility. However, analysts warn that supply constraints could continue to pressure the global diesel market.
Last Friday, US President Donald Trump announced that Russia had agreed to supply diesel to global markets. Subsequently, his administration temporarily eased sanctions on Russian fuel.
However, the International Energy Agency (IEA) warned that limited Russian refinery capacity could restrict additional diesel supplies. Therefore, easing export restrictions may not significantly improve the global diesel market.
The IEA also reported that Russia’s crude oil production increased by 65,000 barrels per day in September. Output reached 8.43 million barrels per day, although it remained 870,000 barrels per day below the previous year’s level.
As a result, limited refinery capacity could keep global diesel supplies tight despite the prospect of increased Russian exports.