Oil prices increased on Wednesday due to concerns about supply constraints from a developing storm in the Gulf of Mexico and Houthi attacks on Saudi Arabia. These concerns come against the backdrop of increased crude oil supply from the Middle East and will have significant impacts on the global oil market.
Increase in Crude Oil Prices
As of 04:00 GMT, Brent crude futures rose by $1.05, or 1.04%, to $101.63 per barrel. Additionally, West Texas Intermediate crude futures also increased by 80 cents, or 0.89%, trading at $90.24 per barrel.
Weather forecasters have announced that a storm is developing in the Gulf of Mexico, which is likely to impact oil and gas production facilities. This storm is recognized as the first Atlantic storm of 2026 and could affect the operations of six refineries. Refineries located in the Gulf Coast states of the U.S. account for about 50% of the country's refining capacity of 18.2 million barrels per day.
Threats from Houthi Attacks
Analysts believe that the storm acts as an unintended complication for the crude oil market, increasing the likelihood of disruptions in production and refining. Tim Waterer, a senior analyst at KCM Trade, pointed out that the market is already facing supply-side issues.
On the other hand, Houthi attacks on Saudi Arabia also bring new concerns. These attacks occur as Yemeni government forces, supported by Saudi Arabia, have launched a large-scale operation to reclaim areas under Houthi control. These conflicts could negatively impact oil facilities and refinery operations.
The CEO of Vitol stated that approximately 12 million barrels of crude oil per day have been exported from the Middle East by tankers over the past 7 to 10 days. Meanwhile, Prince Abdulaziz bin Salman, Saudi Arabia's Minister of Energy, announced an increase in oil transfers through the country's East-to-West pipeline to 5.8 million barrels per day.
Analysts warn that the market may still be concerned about any potential supply disruptions. Mukesh Sadeh, a senior oil analyst at X-Analysts, noted that attacks and refinery shutdowns could maintain a price gap in the crude oil market.
This comes as international relations remain affected by existing tensions, and the current situation does not seem to be improving.
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