Brent crude tops $113 as Houthi attacks on Saudi Arabia escalate

Crude oil stretched its weekly rally on Friday morning. Brent futures were 58 cents higher at $113.75 a barrel by 0439 GMT, a 0.5% gain that followed a 4% jump on Thursday — the benchmark's strongest single session in months, taking it to the highest print since early May. US benchmark WTI finished the same window 66 cents higher at $100.13, a 0.7% advance.

Behind the move: a sharp escalation of Houthi attacks on Saudi Arabia, with Aramco evacuating staff from its Dhahran headquarters Thursday and Washington ordering diplomats' families out of the kingdom.

Brent is now positioned for a third straight weekly advance. WTI, in contrast, looks set to finish the week lower after two weeks of gains. The split shows exactly where the risk premium sits: the Middle East-exposed barrel is pricing conflict, the US domestic barrel is not.

Wednesday's strikes killed two people at Dammam's civilian airport and wounded eight more, while a separate drone hit on a Saudi oil field killed two others, Reuters reported. The Iran-aligned Houthis have pushed toward Bab el-Mandeb, the strait at the Red Sea's entrance through which a large share of the world's crude moves. Kpler counted at least 18 attacks on vessels in the past fortnight; Riyadh answered with strikes on missile-launcher sites, saying its defenses intercepted many incoming ballistic missiles.

Libya's state oil chief said Thursday that a valve on the pipeline running from the Hamada and Tahara fields to the Zawiya export terminal had been closed, cutting output at both sites. Separately, Iran's Revolutionary Guard navy said it struck four ships accused of illicit oil transfers and set them ablaze, while media reported unexplained explosions in the southern Iranian city of Sirik. Reuters also reported that Washington and Jerusalem have drafted plans for fresh strikes on Iran after America's November 3 midterm vote.

Why it matters

Crude at a five-month high lands awkwardly for inflation: September US producer prices ran at 6.3% on the year — fastest since late 2022 — with gasoline's 20.3% surge doing most of the work, and that print came before this week's spike. With the Fed having raised rates 25 basis points in September, another round of energy-cost pressure is precisely why traders have a further hike at the October 27-28 meeting back on the table. Yesterday's MarketRadar piece on the Canadian dollar traced the same chain — crude's climb feeding hike expectations — while gold's drop to $4,041 showed what rising rate-hike odds do to non-yielding assets.

Analysts are watching the gap between fear and flow: ING wrote Friday that markets are growing more anxious about a renewed Gulf escalation endangering shipments that have, so far, held up surprisingly well. The caveat matters: Reuters' Energy Watch column notes Middle Eastern crude exports have actually recovered in recent weeks and now sit above pre-war levels — yet Brent keeps climbing, a sign traders doubt those flows survive a wider war. XS.com analyst Linh Tran put the test plainly: what counts is how much supply is truly disrupted and how long restoration takes — that decides the premium traders keep paying.