Yemen’s Houthi rebels claimed responsibility for a Thursday attack on Riyadh airport that killed three people, prompting the United States on Friday to urge Americans in the Middle East to “exercise heightened vigilance.” The Houthis also stepped up missile strikes on Saudi Arabia and sought to shut down its airspace, Haaretz reported, citing Reuters, The Associated Press and Haaretz.
Houthi Strikes and Civilian Risk
The Houthis carried out deadly attacks on airports in Saudi Arabia’s southern region and Riyadh during the week. Debris from an intercepted ballistic missile damaged civilian sites in the kingdom’s capital.
The U.S. security alert followed the claim of responsibility for the Riyadh airport attack. Saudi airports and airspace now sit at the center of the regional security concern.
Oil markets have also faced volatility as attacks on ships in the Strait of Hormuz, a vital route for global crude shipments, increased. Soojin Kim and Edward Bell from MUFG said ongoing fighting between Saudi Arabia and its allies against the Houthis was keeping geopolitical risk in oil markets elevated, while shipping in the Gulf and Strait of Hormuz continued to face threats.
Oil Prices and Regional Tensions
Brent crude, the benchmark for two thirds of the world’s oil, traded 0.82 per cent lower at $103.42 a barrel at 10.35am UAE time on Friday. West Texas Intermediate, which tracks U.S. crude, fell 0.74 per cent to $90.81 a barrel.
Brent had settled more than 4 per cent higher on Thursday, while WTI was on course for a weekly decline. In separate Friday trading figures reported earlier, Brent dropped 1.38 per cent to $102.8 a barrel and WTI fell 1.37 per cent to $90.24 a barrel.
“Brent crude rose 4.1 per cent to $104.20 per barrel on Thursday as renewed Middle East tensions coincided with disruption to US Gulf of Mexico production from Hurricane Isaias,” said Nick Stadtmiller, chief economist and group head of research at Emirates NBD. He said prices fell from their intraday highs after President Donald Trump said the U.S. was holding productive discussions with Iran.
Hurricane Isaias had shut in around 63 per cent of U.S. Gulf of Mexico oil production, threatening refining infrastructure and export terminals. The storm was heading towards the U.S. Gulf coast, where offshore production sites, refineries and export terminals are located. It was expected to reach the coast late Friday or early Saturday, bringing heavy rain and potentially flash floods.
About 500,000 barrels per day of capacity faced risk, Kim and Bell said. The storm-related disruption added to market concerns over regional fighting and shipping threats.
U.S. Pressure on Iran
President Donald Trump said Thursday that he had no intention of ordering attacks on Iran before next month’s midterm elections, temporarily easing supply concerns. In a post on Truth Social, Trump said Iran was in a “very bad condition” economically and militarily, that the U.S. blockade on Iranian shipments through the Strait of Hormuz would remain in “full force,” and that the countries were holding “productive discussions.”
The United States announced fresh sanctions on 17 vessels transporting millions of barrels of Iranian crude oil, as well as petroleum and petrochemical products, to markets in southern and eastern Asia. The U.S. said it was seeking to squeeze Iran’s oil revenue and pressure Tehran as the regional war continued.
“Treasury is starving the tyrannical regime in Tehran of the money it uses to wage war in the region,” Treasury Secretary Scott Bessent said. “We will continue exposing those who enable the regime’s oil sales,” he added in a statement.