Energy
Brent crude climbs past $106 on escalating supply risks
Global oil prices rose as ongoing conflicts in Ukraine and the Middle East heightened concerns over crude and refined product supplies.
Key points
- Brent crude advanced approximately 1.8 percent to settle near $107 a barrel.
- Ukrainian President Volodymyr Zelenskyy dismissed the prospect of an energy ceasefire touted by US President Donald Trump.
- Saudi Arabia faced fresh hostile threats following weekend attacks by Houthi militants that impacted regional infrastructure.
What happened
Global benchmark crude prices advanced about 1.8 percent to settle near $107 per barrel, according to Rigzone reporting. The upward movement followed renewed doubts regarding an energy truce proposed by US President Donald Trump. Ukrainian President Volodymyr Zelenskyy stated that Kyiv would continue targeting Russian energy facilities because Moscow persists in its attacks on Ukrainian infrastructure. Zelenskyy noted that he learned of the proposed agreement via social media.
Simultaneously, tensions in the Middle East intensified as Saudi Arabia reported responding to fresh hostile threats. Operations at Riyadh's primary airport remained halted following weekend strikes by Tehran-backed Houthi militants that resulted in at least 14 fatalities and numerous injuries. Additional incidents were reported in the Strait of Hormuz, where another vessel was reportedly struck, prompting multiple empty supertankers to alter their routes away from the Persian Gulf.
Why it matters
According to Rigzone, ongoing geopolitical conflicts have kept global crude prices more than 70 percent higher this year due to disruptions stemming from the US conflict with Iran. Oxford Economics lead economist Stephen Hare noted that Brent is expected to maintain an average above $100 per barrel through the second quarter of next year, driven by Red Sea export infrastructure attacks and persistent geopolitical risk premiums. Furthermore, reduced transit of refined products through the Strait of Hormuz has created a global squeeze on diesel supplies, driving prices upward worldwide. Efforts by Washington to release sanctioned Russian fuel into international markets faced criticism from European nations and Ukraine, while analysts questioned the efficacy of the planned 500,000-ton shipment.
What comes next
Energy markets continue to monitor developments in maritime transit chokepoints and export terminals in the Middle East. While Saudi Energy Minister Prince Abdulaziz bin Salman emphasized the kingdom's commitment to maintaining energy security and expanding pipeline capacity, analysts anticipate that the return of global prices to long-term equilibrium will proceed more slowly than previously anticipated. In the United States, offshore production in the Gulf of Mexico has begun to recover following the disruptions caused by Hurricane Isaias, providing some operational relief as personnel return to regional platforms.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
CEII follows developments across the world’s energy system and connects them to the data behind them.
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
