Oil prices rebound after Houthis say they attacked Saudi tanker

LONDON: Oil prices rose on Wednesday after Yemen’s Iran-aligned Houthi rebels said they attacked a Saudi oil tanker in the Red Sea, denting hopes of a de-escalation in Iran war hostilities that could restore shipping traffic and oil flows in the Middle East.

Brent crude futures were up $1.51, or 1.9%, at $80.87 a barrel by 1123 GMT. U.S. West Texas Intermediate futures gained 90 cents, or 1.19%, to $76.67.

The Houthis said they had launched a missile attack on a Saudi oil tanker off the coast of Yanbu, a key port for Saudi crude oil exports. That drove oil prices higher on Wednesday, UBS analyst Giovanni Staunovo said.

Saudi officials did not respond immediately to a request for comment. The reports of the attack dented investor hopes of a de-escalation in the Middle East conflict after Qatar said on Tuesday that mediators were making progress with efforts to end the war.

That drove down oil prices by 5% on Tuesday, with Brent closing below $80 a barrel for the first time since July 13.

Tehran, meanwhile, denied that peace talks were under way, contrary to assertions by U.S. President Donald Trump.

“While the immediate geopolitical premium has unwound, the broader supply picture warrants caution,” said Priyanka Sachdeva, head of market insights at Phillip Nova.

Before the war started, about 20% of the world’s oil and liquefied natural gas passed through the Strait of Hormuz.

“The main sticking point appears to be whether Iran will continue to insist on a degree of control over the waterway, and whether the U.S. will stand its ground and refuse that outcome,” IG analysts said in a note.

U.S. crude and gasoline inventories rose while distillate stocks fell last week, market sources said on Tuesday, citing data from the American Petroleum Institute.

Crude stocks rose by about 2.7 million barrels in the week to July 31, the sources said. Elsewhere, China further relaxed controls on fuel exports in August.