Oil slips but stays near six-month highs on Saudi attacks

LONDON: Oil prices fell on Monday after surging last week but still held near six-month highs, amid hopes of easing hostilities between the United States and Iran, although persistent attacks on key producer Saudi Arabia kept investors wary.

Brent crude futures were down $1.90, or 1.63%, at $114.82 by 0959 GMT. US West Texas Intermediate crude futures were down $2.08, or 2%, at $101.19 per barrel.

On Friday, prices settled nearly $3 higher. Brent finished the week up 6% and WTI ended 2.3% higher.

“With the jeopardy doubled by Houthi attacks into Saudi, any Brent price dips back to the lows of last week will find grateful buyers,” PVM Oil Associates analyst John Evans said.

“Corrective processes are notoriously difficult to quantify, but this one has nowhere near reached any sort of levels where bulls might abandon hope.”

On Sunday, Qatari mediators traveled to Tehran as part of an effort to de-escalate regional tensions in coordination with the United States, an official briefed on the situation said.

Also, top officials from Makkah Pact countries Saudi Arabia, Turkiye and Pakistan are set to meet Iran’s leaders in Tehran on Monday in their first high-level contact since attacks by the Houthis on Saudi Arabia became a pressure point in the wider conflict.

Despite the mediation talks, attacks continued over the weekend with the Houthis saying they had struck pumping stations on Saudi Arabia’s East-West crude oil pipeline and Riyadh airport. Saudi Arabia said on Sunday it had intercepted more missiles and drones.

Saudi says Riyadh airport partly reopens despite renewed Houthi threats

The effects of the US-Israeli war on Iran that began on February 28 continue to reverberate as companies adjust to the disruptions of commercial shipping through the key Strait of Hormuz and Bab el-Mandeb Strait caused by the conflict.

October has been the worst month for attacks on commercial shipping in the Strait of Hormuz and nearby waterways, according to data compiled by the Washington Institute for Near East Policy, a think tank that has tracked maritime security incidents worldwide since 2017.

Meanwhile, energy ministers from Saudi Arabia and Singapore said state-owned oil company Saudi Aramco will start storing crude oil in Singapore from the second half of 2027, to shore up the resilience of Aramco’s supply chain in the region.

The head of the International Energy Agency, Fatih Birol, reinforced concerns about the supply situation, saying on Monday at an industry event in Singapore that he does not expect energy markets in 2027 to return to where they were before the Iran war.