Oil Prices Settle at 6-Month High After Houthi Attacks Stoke Supply Concerns

Oil prices surged by more than $3 a barrel on Friday, with global benchmark Brent crude settling at its highest level in nearly six months as traders priced in growing risks to Middle East energy supplies.

Geopolitical Tensions Fuel Rally

Brent crude futures settled at $116.72 a barrel, a gain of $3.55 or 3.14%, marking its highest close since April 29. U.S. West Texas Intermediate (WTI) crude ended the session at $103.27 a barrel, up $3.80 or 3.8%. For the week, Brent gained 6% while WTI rose 2.3%.

The rally was primarily driven by reports of attacks by Iranian-backed Houthi rebels on energy infrastructure in Saudi Arabia, the world's largest crude exporter. According to Reuters, the escalating conflict led Saudi Aramco to order an evacuation of its headquarters in Dhahran on Thursday. "Fears of supply disruptions drove the advance," said Adam Turnquist, chief cross-asset strategist for LPL Financial.

Adding to supply concerns, the United Arab Emirates Ministry of Climate Change and Environment reported an oil spill from a tanker off the coast of Umm Al Quwain. Authorities have not yet identified the cause of the spill or the vessel involved.

Broader Supply Concerns Mount

The recent incidents are part of a wider pattern of rising maritime security risks in the region's critical shipping chokepoints. Clashes have intensified near the Bab el-Mandeb Strait, and data from a Washington-based think tank shows October was the worst month for attacks on commercial shipping in and around the Strait of Hormuz since 2017.

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"The market is concerned about these continued Iranian attacks on tankers that we’ve seen increase over the last week," said Andrew Lipow, president of Lipow Oil Associates. These events threaten the flow of oil through waterways crucial for global energy transport.

Elsewhere, supply tightness was underscored by news from Libya, where the head of the National Oil Corp told Reuters a pipeline valve closure had reduced production from the Hamada and Tahara oilfields.

Strategic Reserves and US Production

In response to localized disruptions, the U.S. Department of Energy authorized an emergency release of 400,000 barrels from the Strategic Petroleum Reserve (SPR) to supply a Phillips 66 refinery in Louisiana. The SPR is currently at its lowest level since 1982.

Meanwhile, U.S. production signals remain neutral. The latest data from energy services firm Baker Hughes showed the total oil and gas rig count, an early indicator of future output, held steady for a second consecutive week at 603.