Oil prices cross $110 after drone attack on Saudi oilfield
What's the story
Oil prices have surged due to a drone attack on a Saudi Aramco oilfield, raising fears of supply disruptions amid the escalating West Asia conflict. Brent crude is trading at $110.18 per barrel, up 1.18%, while US West Texas Intermediate (WTI) crude has crossed the $98 per barrel mark. The attack prompted the US to order some diplomats and their families to evacuate its missions in Saudi Arabia.
Attack details
Yemen's Houthis claim responsibility for attacks in Saudi Arabia
Yemen's Houthis attacked multiple targets on Wednesday, killing at least one person and injuring eight others at a civilian airport in Dammam. A separate drone strike on a Saudi oilfield claimed two lives.
Meanwhile, explosions were reported in Sirik, southern Iran, with Iranian media stating the cause and origin of these blasts remain unknown.
Iran's response
Iran warns US over blockade
Iranian Foreign Minister Abbas Araqchi told the Financial Times on Wednesday that Tehran is fully prepared to defend itself.
President Masoud Pezeshkian also told state media that the US cannot expect dialogue while continuing to blockade and threaten Iran.
The New York Times reported that after the American midterm elections, US and Israeli militaries have drawn up specific plans for renewed strikes against Iran.
Military preparations
Hegseth met Netanyahu in Israel to discuss fresh strikes
Preparations for a short but intense operation are underway, with both militaries ramping up drills and flying aircraft over Iraq to practice strike maneuvers.
US Defense Secretary Pete Hegseth met Israeli Prime Minister Benjamin Netanyahu in Israel this week to discuss fresh strikes.
Potential targets include Iran's energy infrastructure, nuclear facilities, and missile/drone arsenal.
Some officials believe another major round of attacks could push Iran's economy over the brink and compel Tehran to make diplomatic concessions.
Market predictions
Uncertainty surrounding conflict makes it hard to predict oil prices
The future course of the conflict remains uncertain, making it hard to predict oil prices.
JPMorgan analysts said modeling the war's eventual trajectory is difficult.
At the start of the conflict, they expected the US administration to avoid crossing certain economic thresholds.
Seven months later, many of those thresholds have been crossed without a clear exit strategy in sight.
Price predictions
Goldman Sachs predicts oil at $120 per barrel
The risk of further supply disruptions has also strengthened expectations of higher oil prices.
Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks have highlighted how shipping disruptions could spread and intensify.
Goldman Sachs has predicted a scenario where oil prices could hit $120 per barrel if vessel attacks in the Middle East escalate.
However, a return to normal export levels could bring prices down toward $80 per barrel.