Oil prices advance amid new Iranian threats to tankers

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Oil prices advance

Highlights

Oil rises as Iran intensifies attacks on Gulf shipping.
Houthi strikes increase risks to Saudi energy assets.
Russian diesel exports offer limited supply relief.

December Brent crude futures rose 0.24%, to $105.94 a barrel, while November West Texas Intermediate futures gained 1.20%, to $95.27. Both benchmarks advanced as traders assessed escalating threats to regional shipping and Saudi energy infrastructure, although gains were more restrained than those recorded earlier in the session, Reuters reports.

Iran changes tactics as shipping threats intensify

Iranian officials have acknowledged adopting different methods to target commercial vessels, with one indicating that the shift began approximately 10 days ago. The strategy is intended to maintain pressure on oil markets as Washington seeks to contain energy costs ahead of the U.S. midterm elections. Although officials provided few operational details, recent incidents suggest that commercial shipping remains vulnerable even as military efforts continue to protect the region's maritime routes.

A container ship sank south of the Strait of Hormuz after reportedly striking a naval mine and catching fire, according to Iran's Revolutionary Guards Navy. The incident followed reports from the United Kingdom Maritime Trade Operations that a tanker and another container ship had been struck by unidentified projectiles inside the strait. Together, the attacks have renewed concerns about shipping disruptions, higher insurance costs, and the possibility of reduced energy exports.

Saudi Aramco attack raises regional supply concerns

The conflict also extended to Saudi Arabia, where Iran-aligned Houthi forces struck an administrative building belonging to Saudi Aramco in Dhahran. Saudi authorities reported a limited fire, while the Houthis have continued launching missiles and drones in retaliation for Saudi support of Yemeni government forces.

Riyadh's international airport has reportedly been struck four times over the past week, including an attack Saturday that killed 13 people. Although the Aramco incident did not establish a major disruption to crude production, the widening range of targets has increased uncertainty over regional energy infrastructure.

Russian diesel supplies offer limited relief

The prospect of additional Russian fuel exports could moderate oil price gains, but the immediate impact appears limited. President Donald Trump announced last Friday that Russia had agreed to supply diesel to international markets, prompting Washington to temporarily ease restrictions on Russian fuel exports. However, the International Energy Agency indicated that insufficient operational refinery capacity would prevent the changes from materially improving global diesel availability.

Russian crude production increased by 65,000 barrels per day in September to 8.43 million barrels daily, according to the IEA, but remained 870,000 barrels per day below its year-earlier level. Those figures suggest that additional Russian supplies may do little to offset potential disruptions to Middle Eastern energy exports.

For oil markets, the main concern remains the risk of prolonged shipping disruptions near the Strait of Hormuz and further attacks on Saudi infrastructure. Even without major production losses, continued instability could raise transportation costs and sustain pressure on global energy prices.

Earlier, we reported that Houthi attacks on Saudi Arabia raise fears of wider Middle East war.

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