LONDON: Oil prices rose on Friday as Houthi attacks in Saudi Arabia heightened concerns over potential disruptions to energy supplies from the Middle East.
Brent crude futures gained 58 cents, or 0.5%, to $113.75 per barrel by 0439 GMT, while US West Texas Intermediate (WTI) crude rose 66 cents, or 0.7%, to $100.13 per barrel.
Brent, which settled at its highest level since May 4 on Thursday, was on track to record a third consecutive weekly gain. WTI, however, was set to end the week lower after two successive weeks of gains.
Saudi Aramco ordered the evacuation of its headquarters in Dhahran, near the Gulf coast and Bahrain, on Thursday as fighting intensified between Saudi Arabia, the world’s largest crude exporter, and Yemen-based Houthi forces, Reuters reported.
Analysts at ING said markets were increasingly concerned about renewed escalation in the Persian Gulf, which could threaten oil shipments that had so far remained relatively resilient. They added that the possibility of further conflict was likely to sustain a significant geopolitical risk premium in oil prices.
Clashes involving the Houthis and a Saudi-led coalition supporting Yemen’s internationally recognised government have intensified as the Iran-aligned group advanced towards Bab el-Mandeb, a strategic shipping chokepoint at the southern entrance to the Red Sea.
Linh Tran, an analyst at XS.com, said the extent of actual supply disruptions and the time required to restore operations would determine the additional risk premium reflected in oil prices. She added that continued attacks and delayed deliveries could provide further support for elevated prices.
Meanwhile, oil production in Libya has also been affected after a pipeline valve connecting the Hamada and Tahara oilfields to Zawiya port was shut, reducing output at both fields, the head of Libya’s National Oil Corporation told Reuters on Thursday.