Crude oil prices have risen following a reported attack by Ansar Allah (the Houthis) on Riyadh Airport, according to a market report citing JPMorgan. The West Texas Intermediate (WTI) rose to $96.2, while the global benchmark Brent increased to $99.8.
The report indicates that the attack, which targeted the airport and a fuel depot belonging to Saudi Aramco, led to significant flight cancellations and a large smoke plume visible on top flight websites. The incident occurred after Saudi authorities issued their first air raid alert since the conflict with Ansar Allah began.
Analysts cited in the report note that the closure of the East-West pipeline, which has been pumping millions of barrels of oil since the US-Iran war started earlier this year, complicates the situation. The report suggests that fixing the pipeline and its terminal will take months due to parts shortages and weather complications, and that the infrastructure may remain a target for Iran, Ansar Allah, and Iraqi militias.
Concerns about the Strait of Hormuz are also escalating, with Iran continuing to strike ships attempting to cross the narrow strait. Meanwhile, US Strategic Petroleum Reserve (SPR) levels have fallen to the lowest point in over four decades, dropping to 284 million barrels from 415 million barrels in January, according to the Energy Information Administration (EIA).
Market commentary includes warnings from Chevron CEO Michael Wirth regarding depleting reserves and falling supplies, and a Goldman Sachs prediction that oil could jump to $120 if the supply shock continues. JPMorgan is noted as stating that it is not seeing an endgame for oil markets, citing a stalemate between the US and Iran and the upcoming midterm election.
