After a brisk three-day climb, Brent cooled to under $106 a barrel, while WTI held around $93 as traders took a breath. Diesel futures in New York dropped for a third day after Russia agreed to release additional volumes following a request from Trump. The pullback follows gains fueled by worry that a widening Middle East war could complicate the region's supply recovery. Even with the setback, crude is up more than 70% for the year amid the US war on Iran roiling energy markets.
Iran-backed Houthi militants hit Saudi Arabia's principal airport over the weekend with drones and missiles, an attack that left at least 16 dead, including a US citizen, and injured about 300. The barrage has increased calls on Washington to deepen its involvement in the Yemen conflict. The airport assault followed the start of a Riyadh-led push to reclaim Houthi-held territory.
Trump has stated he would weigh taking part in Saudi-backed strikes against the Yemen-based group. Separately, he said breaches of his "energy ceasefire" had occurred between Kyiv and Moscow, and President Volodymyr Zelenskyy stated that Ukraine would keep hitting Russia because the nation's energy infrastructure remains under attack.
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Strikes on tankers in the Strait of Hormuz have escalated, and an increasing number of supertankers have steered clear of the Persian Gulf in recent days. Meanwhile, Saudi Arabia is seeking to expand its ability to ship crude without passing through Hormuz. At a Monday conference in Riyadh, Energy Minister Prince Abdulaziz bin Salman said Saudi Aramco could boost export capacity by 1.2 million barrels a day in seven to eight weeks by converting existing gas pipelines. He added that the country intends to enlarge a Hormuz-avoiding pipeline by 40% to hit 10 million barrels a day in two to three years.
Middle East oil flows have rebounded sharply in recent weeks, and some Wall Street banks say shipments are close to pre-war levels.
This is a market juggling fast-changing geopolitics and quick-fix supply plans, which means prices can whipsaw. Watch tanker traffic and Saudi rerouting efforts, because those shifts show up in what you pay for fuel and how bumpy the ride might be.
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