Oil Hits Six-Week High After Houthi Attack on Saudi Energy Sites

Oil prices climbed to a six-week high on Tuesday following a major Houthi attack on Saudi Arabian energy infrastructure. The assault, which targeted four cities in the south of the kingdom, wounded more than 70 people and set oil installations ablaze, escalating fears of a wider regional conflict.

Brent crude futures rose 0.7% to $97.70 a barrel, while US West Texas Intermediate (WTI) gained 1.3% to $92.69. This puts Brent on track for its strongest close since late July and WTI since early June.

The attack comes amid severe disruptions to Gulf oil exports, which have been impaired since Iran struck regional energy infrastructure and shipping lanes in the Strait of Hormuz. Saudi Arabia had been routing some exports via the Red Sea to bypass the strait, but Tuesday's strikes represent one of the largest direct attacks on the kingdom, threatening to widen the war's economic fallout.

"The price action reflects both genuine physical tightness and a clear geopolitical risk premium," said Tim Waterer, chief market analyst at KCM Trade. Commodity vessel traffic through the Strait of Hormuz remains minimal, with only seven ships transiting on Monday, according to Kpler data.

Wall Street is now bracing for prolonged disruption, with Goldman Sachs and HSBC raising their crude price forecasts for 2026 and 2027. Global fuel prices remain elevated due to refinery outages, particularly in the Middle East and Russia. US diesel prices hit record highs last week, and gasoline prices were at all-time peaks over the Labor Day weekend.

Industry executives expect diesel supply to stay tight through winter, citing limited spare refining capacity, Russia's export ban following Ukrainian attacks, and seasonal demand. In China, August crude imports improved from July but fell 23.4% year-on-year, as Beijing restricts refined product exports to protect domestic supply.

Prices pared some gains after US President Donald Trump urged Russian President Vladimir Putin to end the war in Ukraine swiftly. Germany also announced it would send Patriot air defense missiles to Ukraine, warning of an intensified Russian air campaign as winter approaches.