Oil skyrockets following Middle East escalation over the weekend

Brent crude’s price has opened the week above $115/bbl as renewed hostilities swept across the Middle East over the weekend.

IMAGE: Getty Images

Attacks from both sides escalated over the weekend, with the US Central Command (CENTCOM) striking over 10,000 Iranian targets and military bases since the beginning of the war in late-February.

Israeli forces have also targeted several Iranian sites developing ballistic missile systems, the Israel Defense Forces (IDF) said on social media platform X.

Meanwhile, Iranian airstrike on Prince Sultan Air Base in Saudi Arabia that host US troops damaged several aerial refuelling assets, the Associated Press (AP) reported.

The Prince Sultan Air Base is located right outside Saudi Arabia’s capital Riyadh. The attack has heightened security concerns about the OPEC leader’s energy infrastructure.

Iranian parliament speaker Mohammad Bagher Qalibaf ruled out the possibility of peace talks with the US, saying Iranian forces stand ready to confront US troops and warning of severe retaliation against them and their regional allies.

Besides, Yemen-based Houthi militants formally joined the conflict, firing ballistic missiles toward southern Israel, Al Jazeera reported – raising the prospect that the Bab al-Mandab Strait could also face closures.

Saudi Arabia, OPEC’s biggest producer, can reroute crude via its East-West Pipeline to the Red Sea, using the Bab al-Mandab Strait. However, any disruption along that route – such as a potential Houthi blockade – would sharply intensify the supply crunch, according to analysts.

“Saudi Arabia has managed to get around the effective closure of the Strait of Hormuz by utilising its east-west pipeline to get up to 6mb/d [6 million b/d] of oil to the international market via the Red Sea,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

Exacerbating the crisis, US President Donald Trump said in an interview with the Financial Times yesterday that he prefers to “take the oil in Iran” – a move that would require seizing Tehran’s highly crucial energy sites in Kharg Island.  

Against a backdrop of ongoing strikes and a growing US military presence, such comments by the US President have prompted markets to largely dismiss expectations of near-term diplomatic progress.

By Aparupa Mazumder

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