Brent crude prices hovered near a five-month high on Tuesday, October 20, as escalating Middle East tensions prompted traders to factor greater supply risks into the market.
Brent futures rose around 0.5% to $110.07 a barrel, after reaching $110.70 in the previous session, the highest level since May 20. US West Texas Intermediate crude also gained, trading near $104 a barrel.
Reports of Houthi attacks on Saudi energy infrastructure and attacks on vessels in the Gulf have heightened concerns about the security of vital oil facilities and shipping routes. Although the full impact on supplies remains uncertain, the threat has added a geopolitical risk premium to prices.
Oil markets are also weighing the potential impact of a US move to ease some restrictions on Russian energy exports, which could increase available supplies and offset some upward pressure.
Higher crude prices pose risks for oil-importing economies, potentially raising fuel costs and inflation while increasing pressure on businesses and consumers. Traders will continue to monitor developments in the Middle East and any evidence of disruptions to oil flows for further direction.
