Oil prices rise amid supply concerns in the Middle East

Oil prices registered gains on Wednesday as shipping risks in the Red Sea and threats of attacks on Saudi Arabia's oil infrastructure in the Middle East heightened concerns over supply disruptions. Brent crude futures rose 0.78% to reach $109.64 per barrel, while U.S. crude (WTI) climbed 0.78% to $98.58.

The Islamic Revolutionary Guard Corps Navy reported that a fire broke out on a supertanker after it struck a sea mine south of the Strait of Hormuz. According to vessel-tracking firm Kpler, attacks on at least 18 ships have been reported within two weeks. LSEG analysts stated that tanker attacks have spread beyond the Strait of Hormuz into the Gulf of Oman; these developments also threaten loadings outside the Gulf and ship-to-ship transfers supporting regional oil shipments. While the Houthis claimed to have launched attacks on Aramco's Yanbu facility, the Shaybah oil field, and airports in Riyadh and Abha in Saudi Arabia, the death toll from a Houthi attack on government forces in Yemen rose to 73.

Oil prices had declined in the previous session after the Iranian President discussed mediation efforts with Pakistan's Chief of Army Staff in Tehran. While Brent crude fell 0.69% to close at $108.79 on Tuesday, it had touched a five-month high of $111.99 during the session. U.S. Department of Energy officials announced that they are working with refiners globally to increase fuel production after diesel shortages drove up prices, and eight analysts surveyed by Reuters estimated that U.S. crude inventories decreased by about 800,000 barrels in the week ending October 16.