Oil Prices Edge Higher as Middle East Security Risks Keep Markets on Alert

Oil prices edged higher on Tuesday as security concerns in the Middle East kept a geopolitical risk premium in the market, despite signs that regional crude exports have remained relatively resilient and the G7 has agreed to release emergency fuel reserves.

Brent crude futures rose 27 cents, or 0.3 percent, to $100.59 a barrel at around 6:30 a.m. Saudi time. US West Texas Intermediate crude futures gained 30 cents, or 0.3 percent, to $89.73 a barrel.

Market participants remain focused on shipping conditions around the Strait of Hormuz, a key route for global energy supplies. While crude shipments have continued despite the conflict, renewed attacks on tankers have raised concerns about the cost and security of transporting oil.

Priyanka Sachdeva, head of market insights at Phillip Nova, said shipping data showed regional crude exports had exceeded pre-war levels on several days in late September. Producers have used alternative routes and logistical adjustments to keep oil moving despite disruption around Hormuz.

However, she said the data did not yet indicate a complete return to normal supply conditions because insurance, routing, security and transportation costs remain elevated.

Gulf oil flows excluding Iran rose above 81 percent of pre-war levels in September, according to data released on Tuesday. The increase was driven partly by a recovery in Saudi Arabian exports despite attacks on the kingdom’s oil infrastructure and growing attacks by Iran-backed forces on regional shipping.

Iranian oil exports, meanwhile, fell to zero because of a US blockade, according to the data.

Supply concerns were also eased after G7 countries agreed last week to release 100 million barrels of crude and diesel from emergency reserves. The countries also pledged not to impose energy export restrictions following pressure from US President Donald Trump.

Despite the additional supplies, uncertainty remains over the security of regional oil infrastructure and shipping routes. The conflict between Saudi Arabia and Iran-backed Houthi forces in Yemen has continued, while talks between Washington and Tehran remain stalled.

Saudi-backed Yemeni government forces advanced on Monday to retake coastal areas around the Bab el-Mandeb Strait, reaching toward the city of Mocha. The Houthis subsequently claimed attacks on targets in Saudi Arabia, including an Aramco refinery in Rabigh. The claims could not immediately be verified.

Vivek Dhar, an analyst at Commonwealth Bank of Australia, said low global oil inventories were another factor making traders cautious about expecting prices to remain lower.

Shipping costs between the Gulf and Asia have also reached record levels, reflecting tight conditions in the tanker market and highlighting the vulnerability of the oil supply chain to further disruption.