WTI holds near $99.00 at five-week highs as Middle East supply risks intensify

WTI climbed towards five-week highs as Houthi attacks hit Saudi oil infrastructure and Red Sea ports.
Global market risk is rising on the prospect of US-Israeli strikes against Iranian energy facilities after the midterms.
Amid growing fears of regional conflict, Saudi Aramco reportedly instructed employees to evacuate its Dhahran headquarters.

Supply concerns and mounting geopolitical tensions in the Middle East are keeping West Texas Intermediate (WTI) oil close to a five-week high. Extending its gains for a second consecutive day, WTI is trading at around $98.80 per barrel in Friday’s Asian session.

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Responsibility for recent attacks on Saudi Arabia’s Red Sea port of Yanbu has been claimed by Iran-backed Houthi militants in Yemen. The group also claimed deadly strikes on an oil field and an airport in the world’s largest crude oil exporter. Concerns have deepened following reports that the US and Israeli militaries have prepared plans for possible fresh attacks on Iran after next month’s midterm elections, with its energy infrastructure likely to be a principal target. In Europe, meanwhile, Ukraine has stepped up strikes against Russian oil refineries amid a US-Russia agreement involving diesel supplies.

The accumulation of these threats is driving the recent rise in prices, energy market analysts stress. Reuters cited a note from energy advisory firm Ritterbusch and Associates, which said that "the complex is rebounding on another strong injection of risk premium related to an additional Houthi attack on Saudi infrastructure amid talk of a combined US-Israeli strike on Iran after the midterms."

An evacuation instruction from Saudi state oil company Aramco has further underscored the urgency of the situation. Six sources familiar with the matter said employees had been told to leave its headquarters in Dhahran on the Persian Gulf. Aramco did not immediately respond to requests for comment. The instruction would represent the company’s first major evacuation since the conflict with Iran began.

“Starting with the oil moves,” is how Deutsche Bank analysts describe their approach, pointing out that “several geopolitical headlines came through overnight that led to mounting concerns about a fresh escalation in the conflict.” They note that Brent has recovered to roughly a five-month high, close to $110 per barrel. Reports of possible US and Israel strikes on Iran’s energy infrastructure, alongside continuing attacks in Saudi Arabia, are fuelling concerns that investors may now be factoring in elevated oil prices lasting well into 2027.

WTI Oil: Key Questions Answered

What Defines WTI Oil?

Among the crude oils traded internationally, WTI, short for West Texas Intermediate, is one of three major types alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is regarded as easy to refine. Produced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, and its price is regularly cited in media coverage.

Which Forces Shape WTI Oil Prices?

Supply and demand underpin WTI oil prices, as they do the prices of other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions arising from political instability, wars or sanctions can also affect prices. Another major influence is the production decisions of OPEC, a grouping of leading oil-producing countries. As oil is traded predominantly in US Dollars, the currency’s value also matters for WTI crude: a weaker US Dollar can improve affordability, while a stronger one can have the opposite effect.

Why Do Inventory Figures Matter for WTI Oil Prices?

WTI oil prices are influenced by weekly inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA), as changes in stock levels reflect shifts in supply and demand. A fall in inventories may signal stronger demand and push prices higher. Conversely, a build-up can indicate greater supply and weigh on prices. The API publishes its report every Tuesday, followed by the EIA the next day. The two sets of findings generally align, differing by no more than 1% on 75% of occasions. Given the EIA’s status as a government agency, its figures are viewed as more reliable.

How Can OPEC Decisions Move WTI Oil Prices?

At meetings held twice a year, the 12 oil-producing nations that make up OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI oil prices: lower quotas can constrain supply and lift prices, whereas increased production has the reverse effect. The wider OPEC+ grouping brings in ten additional non-OPEC members, most notably Russia.