Oil prices surged, with Brent crude climbing 3% to $112 a barrel, a level not reached since 18 May, after Houthi forces struck multiple targets in Saudi Arabia, killing people at a civilian airport in Dammam and at a Saudi oilfield, The Guardian reported. Saudi authorities said debris from an intercepted drone aimed at the Shaybah oil field killed two people. The IRGC also said three additional vessels struck mines in waters to the west of the strait of Hormuz.
The US State Department ordered non-emergency government employees and their family members to leave Saudi Arabia, citing Houthi strikes on civilian airports and other critical infrastructure that produced casualties and travel disruptions. State Department spokesman Tommy Pigott said in a post on X that the ordered departure applies only to Saudi Arabia, citing increasing Houthi attacks on civilian targets. The department warned that hostilities have the potential to escalate rapidly.
Washington also planned to pull family members out of several other missions across the region. Saudi Aramco directed staff at its Dhahran headquarters to evacuate and work remotely.
West Texas Intermediate rose 1% to $98.12. Brent reached $126 a barrel in April, retreated below $100 in late May, then fell to $71 at the start of July as hopes of a ceasefire grew. Prices turned higher again once a US-Iran memorandum of understanding broke down and new hostilities erupted in the Gulf.
A four-year informal ceasefire broke down in July when the Houthis declared a maritime embargo against Saudi Arabia and launched strikes on Saudi airports, oil facilities and Red Sea tankers. The Houthi embargo in the Bab al-Mandab Strait pushed global oil prices higher because Saudi Arabia had shifted its oil export route to the Red Sea after the strait of Hormuz was effectively closed.
The Houthis said their attacks on Saudi Arabia were retaliation for what they described as a Saudi blockade of their territory and an air strike on Sanaa airport they attributed to the kingdom. Saudi authorities confirmed that operations at the Shaybah oil field, which sits near the United Arab Emirates border, were not affected by the drone attack. The IRGC said the vessels it struck were engaged in illegal oil transfers.
The IRGC warned the US that any further provocations could trigger a wider retaliation against its regional bases. Iranian officials said they intend to broaden their attacks to include data centers and undersea internet cables, and are not offering concessions on their nuclear program.
Kpler senior crude oil analyst Muyu Xu said China's crude import demand should keep recovering, with rising refinery throughput and falling crude inventories as the main drivers. Xu put China's September crude stock drawdown at 1.6 million barrels a day, which she described as the fastest on record, attributing it to the war.
Xu said China's reserves stand at 1.1 billion barrels, enough to cover roughly 80 days of refinery demand. She said further large crude arrivals in China looked unlikely given that Iranian cargoes outside the US blockade had been almost entirely discharged.
European and Asian equity markets fell, with the Stoxx Europe 600 down 1%, the FTSE 100 down 0.7%, Japan's Nikkei 225 down 2.7%, South Korea's Kospi down 3.5%, and Hong Kong's Hang Seng down 3%. American Airlines shares dropped almost 4% in pre-market trading. The airline warned high fuel costs would produce a loss this year, dropping an earlier forecast that profit was possible.
Reporting: The Guardian, CNBC, BBC
Written by Pick & Scroll News from the reporting and documents linked above.
