Crude oil prices surge after strike on Saudi refinery

Global oil prices climbed after Yemen’s Houthi rebels reportedly targeted Saudi Arabia’s largest oil refinery, renewing concerns over Middle East supply disruptions. Diplomatic talks continue to ease tensions, while OPEC+ producers are expected to maintain December output targets amid market uncertainty

New Delhi: Global oil prices rose on Wednesday after Saudi Arabia’s largest oil refinery was reportedly hit with a missile by Yemen’s Iran-aligned Houthis. Brent crude futures for December delivery gained $1.55, or 1.36 per cent, to $115.43 a barrel, while US West Texas Intermediate crude rose 1.43 per cent to $101.32 a barrel.

Houthis said they targeted the oil refainery reviving concerns over crude supply risks in the Middle East despite recent diplomatic efforts that had eased market worries. Saudi authorities did not confirm the strike on the 5.5 lakh barrel per day facility. The price surge reversed part of the previous session’s losses, when oil fell nearly $2 a barrel as talks in the Middle East helped calm concerns about potential supply disruptions despite expectations of a rise in US crude inventories.

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A diplomatic meeting in Tehran saw representatives from Saudi Arabia, Turkey and Pakistan in talks with Iranian officials to defuse regional tensions, according to reports. All four countries reportedly agreed to continue dialogue to strengthen cooperation on peace and security.

Meanwhile, OPEC+ producers are expected to leave December output targets unchanged at a meeting on Sunday, according to multiple reports. Output from most of the group’s seven core producers, including Saudi Arabia, Russia and Iraq, remains below their output targets. Saudi Arabia is the world’s second-largest crude producer and biggest oil exporter.

The West Asian conflict has placed pressure on the Strait of Hormuz which is a vital maritime bottleneck that handled about 20 per cent of global energy shipments prior to hostilities in February. Energy markets remained on edge after Iranian attacks on oil tankers near the strait pushed Brent past $117 a barrel last week, its highest since April. Brent briefly retested $117 on Monday before settling lower.