Oil prices rose sharply Oct. 23 as escalating attacks on Saudi Arabian energy infrastructure and mounting threats to Middle East shipping heightened concerns over further supply disruptions.

Oil prices rose more than 3% on Oct. 23, with Brent crude futures climbing above $117/bbl, their highest level since late April, while US benchmark West Texas Intermediate (WTI) advanced above $103/bbl. Brent was on track for a third consecutive weekly gain, reflecting a growing geopolitical risk premium amid continued regional hostilities.

Market concerns intensified following attacks by Yemen's Houthi movement on Saudi targets, including energy infrastructure and airports. On Oct. 21, Saudi air defenses intercepted a drone targeting a processing plant at Saudi Aramco's Shaybah oil field. Falling debris caused a fire in a contractor's vehicle, killing two people and injuring two others, according to the Saudi Energy Ministry. Operations at the field were unaffected.

Saudi Aramco also instructed employees to evacuate its headquarters in Dhahran and work remotely as regional hostilities escalated, Reuters reported Oct. 22, citing people familiar with the matter. Although the latest incident at Shaybah did not interrupt production, continued attacks have raised concerns about the security of Saudi energy infrastructure and the reliability of regional supplies.

Shipping risks have added to market uncertainty. October has recorded the highest number of attacks on commercial vessels in the Strait of Hormuz and surrounding waterways since tracking began in 2017, according to data compiled by the Washington Institute for Near East Policy. Although Middle Eastern crude exports have recovered strongly from earlier disruptions, the escalation in maritime attacks has raised questions about whether those flows can be sustained.

The United Arab Emirates (UAE) also reported an oil spill from a tanker off Umm Al Quwain on Oct. 23. Authorities did not identify the vessel or establish the cause of the incident.

Supply concerns have been compounded by disruptions in Libya. The country's National Oil Corp. (NOC) reported Oct. 22 that unauthorized individuals closed a valve on the Hamada–Zawiya crude oil pipeline near the Zawiya refinery. The closure reduced production from Hamada and Tahara oil fields. NOC warned that a prolonged shutdown could further disrupt production and reduce oil revenues.

US inventory data provided additional support to prices. Commercial crude oil inventories fell by 3.06 million bbl to 412.52 million bbl in the week ended Oct. 16, marking a third consecutive weekly decline, according to the US Energy Information Administration (EIA). Stocks were about 3% below the 5-year seasonal average.

Estimated US crude oil production declined by 410,000 b/d to 13.27 million b/d during the week, partly reflecting continued offshore production shut-ins following Hurricane Isaias.