Geopolitical Tensions and Supply Risks Push Oil Higher
WTI pared earlier declines but stayed lower, trading around $94.00 a barrel in European hours on Thursday as tensions in the Middle East supported crude. Saudi Arabia’s conflict with Yemen’s Houthis escalated after the group vowed to keep striking Saudi airports and energy infrastructure, following an attack reported to have badly damaged the headquarters of state oil company Saudi Aramco. Shipping risks also rose: a container ship and a dry bulk carrier sank near the Strait of Hormuz in the past 24 hours after separate projectile strikes, while attacks around the waterway have accelerated over the past ten days. Iran said it is stepping up strikes in response to a US port blockade and tougher sanctions introduced last month, and Ukrainian attacks on Russian energy assets added to supply-risk concerns.
Regulatory Changes and Economic Pressures Limit Gains
Upside moves were restrained by potential US regulatory changes. The Trump administration is weighing easier restrictions on “shadow fleet” vessels carrying oil and petroleum products from sanctioned producers including Russia, Iran and Venezuela, and a US official said the aim is to bring down record-high global freight rates. The talks follow a temporary lifting of sanctions on Russian diesel fuel, which drew criticism from Ukraine, European allies and some Senate Republicans, while inflation worries were reinforced after the CPI print.
