On Tuesday, Brent crude futures increased by 55 cents to $110.10 a barrel, nearing a five-month high, while US West Texas Intermediate crude rose to $103.91. Analysts from ING noted that the market is currently pricing in a significant risk premium due to ongoing volatility in the region.
Reports indicate that at least 18 vessels have been attacked in the Gulf over the past two weeks, maintaining this risk premium. The Iran-aligned Houthi group has claimed responsibility for multiple attacks on Saudi energy and military targets, including significant sites like an Aramco facility and airports.
These developments have raised concerns about regional stability and the potential for further disruptions to energy supplies, keeping oil prices elevated above $100 a barrel. Additionally, a preliminary poll suggested a decline in US crude oil stockpiles, which could further support prices.
While there is some potential for increased Russian diesel supply, traders are primarily focused on the risks posed by the ongoing geopolitical situation in the Gulf region