Oil climbs as Gulf storm, Houthi strikes threaten supply

Oil prices rose in early Asian trading on Wednesday, Oct. 7. Traders weighed a storm heading toward U.S. oil-producing areas in the Gulf of Mexico and escalating Houthi attacks on Saudi Arabia against signs that more Middle East crude is reaching markets. Reuters reported that Brent futures were up 93 cents, or 0.92%, at \$101.51 a barrel by 0022 GMT. U.S. West Texas Intermediate rose 82 cents to \$90.25.globalbankingandfinance

The gains add to a run of high prices driven by the U.S.-Israeli war with Iran and disrupted shipping in the Strait of Hormuz. A September brief from National Bank of Kuwait said Brent went back above \$100 that month after Houthi and Iran-aligned militia attacks on Saudi energy infrastructure.nbk

Storm threatens Gulf output and refining

U.S. forecasters said Tuesday that Tropical Depression Nine was moving toward Louisiana and Mississippi. They expect it to become the first Atlantic hurricane of 2026 within two days. The National Hurricane Center said it should reach tropical storm strength by early Wednesday and approach the northern Gulf Coast on Friday. The offshore areas in its path produce 15% of U.S. crude oil and 5% of the country's natural gas. Six refineries in the forecast landfall area could be affected. They are run by Shell ↗ 1.14%, Valero Energy ↘ 0.03%, Marathon ↘ 0.26%, PBF Energy ↘ 1.52% and Chevron ↗ 0.54%. Refineries in Gulf states make up about half of the country's 18.2 million barrels per day of refining capacity.reuters+1

KCM Trade chief analyst Tim Waterer called the storm "an unwelcome complication for crude," saying it raises "the prospect of production and refining disruptions at a time when the market already has enough supply-side headaches".globalbankingandfinance

Market sources citing American Petroleum Institute data said U.S. crude stocks fell by 2.09 million barrels in the week ended Oct. 2.globalbankingandfinance

Houthi strikes and Hormuz tensions

The Saudi aviation authority said the airports in Jazan and Najran were targeted in two attacks on Monday evening. The strikes came as Saudi-backed Yemeni government forces pressed an offensive against the Houthis, supported by Saudi airstrikes. A market note carried by FXEmpire said Iran had also stepped up attacks on tankers in the Strait of Hormuz. It added that traders are watching an upcoming International Energy Agency meeting that could lead to releases of diesel and crude stocks.pluang+1

Some supply is still getting through. Saudi Energy Minister Prince Abdulaziz bin Salman said Tuesday that flows on the East-West pipeline had reached 5.8 million barrels a day. The head of Vitol said about 12 million barrels per day of crude had left the Middle East on tankers over the past seven to 10 days.globalbankingandfinance

Diplomacy offered little relief. On Tuesday, President Donald Trump said of Iran that "nobody knows who the hell is running the country".globalbankingandfinance

"Prices will stay elevated near a \$100 level without any material de-escalation emerging," said Mukesh Sahdev, chief oil analyst at X Analysts.globalbankingandfinance