Brent crude climbed above $115 a barrel on Wednesday as continued Houthi attacks on Saudi Arabia renewed concerns over potential disruptions to Middle East oil supplies, reversing some of the previous session’s losses as diplomatic efforts to ease regional tensions continued.
Brent crude futures rose $1.48, or 1.3 per cent, to $115.36 a barrel as of 0140 GMT, while US West Texas Intermediate (WTI) crude gained $1.22, or 1.22 per cent, to $101.12, according to Reuters.
The gains reflected continuing uncertainty over energy supplies from the Gulf, where the conflict involving Iran and its regional allies has heightened risks to oil production, processing facilities and export infrastructure.
Oil prices had fallen by nearly $2 a barrel on Tuesday as diplomatic developments in the Middle East offered some reassurance to markets. However, the latest developments have underscored the fragile security situation, with traders continuing to assess the prospects for a diplomatic resolution against the risk of further disruption.
The latest diplomatic initiative involved representatives of Saudi Arabia, Turkiye and Pakistan holding talks with Iranian officials in Tehran on Monday. According to Iranian state media, the four countries agreed to continue discussions aimed at strengthening regional peace and security.
The diplomatic engagement has helped improve market sentiment, although uncertainty remains over whether the talks will lead to a broader reduction in hostilities.
Meanwhile, the Houthis claimed on Tuesday that they had struck Saudi Aramco's Ras Tanura refinery with a ballistic missile and caused a fire. Saudi authorities had not immediately confirmed the claimed strike on the facility, which has a processing capacity of about 550,000 barrels per day.
Separately, Saudi Arabia reported intercepting missiles and drones targeting several parts of the kingdom, including Riyadh and the Eastern Region, as the latest round of hostilities continued.
UBS expects Brent prices to remain elevated at around $110 a barrel towards the end of the year, revising its previous forecast of $100, according to Reuters.
