Oil prices jumped on Thursday after a new wave of attacks on Saudi Arabia reminded traders how quickly the Middle East conflict can reach the energy supply chain. Brent crude gained about 3 percent to trade near $112 a barrel, a five-month high, while US benchmark West Texas Intermediate rose to between $98 and $100.
Both benchmarks are now up more than 40 percent this year.
What happened in Saudi Arabia
The trigger was a series of strikes by Yemen’s Iran-backed Houthi movement on Wednesday. Saudi authorities said King Fahd International Airport in the eastern city of Dammam was hit late in the evening, halting operations. At least two people were killed and eight injured, the civil aviation authority said on Thursday, raising an earlier toll of one. The airport resumed operations on Thursday morning, though damage was still being assessed.
Earlier on Wednesday, a drone aimed at Saudi Aramco’s Shaybah oil field killed two people when air defences intercepted it. The Energy Ministry said production was not affected. The Saudi-led coalition reported shooting down seven drones across the kingdom, including some heading for the Eastern Province and the area around Madinah.
A US travel advisory said Riyadh’s King Khalid International Airport remained suspended, with Jeddah and Dammam running with delays and cancellations.
Washington pulls staff
The attacks prompted the US State Department to order non-emergency government employees and their families to leave Saudi Arabia. Spokesman Tommy Pigott said the move applied only to the kingdom, pointing to the Houthis’ growing attacks on civilian airports and critical infrastructure, and officials denied it signalled a wider Gulf withdrawal.
Separately, a report said US and Israeli military planners have drawn up options for renewed strikes on Iran after the November 3 midterm elections. That detail was not confirmed by officials, but it fed the nervousness in trading rooms.
A market torn between two stories
Oil is being pulled in opposite directions. On one side are the attacks, and Iran’s Revolutionary Guard said it hit several vessels near the Strait of Hormuz that used a route Tehran rejects. On the other, indirect US–Iran talks continue, and Iranian Foreign Minister Abbas Araghchi said his country is ready to give diplomacy another chance if Washington shows a sincere wish to build trust.
Physical flows offer a partial counterweight. Data from the research firm Kpler suggests exports through the Strait of Hormuz have recovered to close to pre-war levels, even though shipping disruption persists. US government data also showed commercial crude inventories fell by 3.1 million barrels to 412.5 million in the week to October 16, a sign of firm demand.
Analysts at ING said crude remained “well bid” above $110 after the latest attacks.
Why it matters beyond the oil market
Higher crude is feeding straight into inflation. Central banks including the US Federal Reserve, which meets next Wednesday, are weighing whether energy-driven price rises will spread into wages and core prices. Bond markets have already pushed borrowing costs higher, and equity futures fell sharply on Thursday as oil climbed.
For consumers, the effect arrives at the pump and in heating and freight costs. Diesel has been particularly expensive, and a higher oil price tends to push up the cost of moving food and goods.
What to watch
Three things will decide the next move. The first is whether the Houthis keep targeting Saudi infrastructure, especially anything that interrupts production rather than just travel. The second is the course of the US–Iran talks and whether the reported plans for strikes after the midterms firm up. The third is Hormuz, where a single serious attack on tanker traffic could change the supply picture overnight.
Until there is clarity, traders say, oil is likely to stay volatile, with every headline from the Gulf capable of moving prices by several dollars.
