Oil Drops 2% Amid Saudi Attack Fears, Demand Concerns — SkimNews
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- U.S. West Texas Intermediate futures slid 2.19% to $101 a barrel on Monday amid volatility triggered by Houthi attacks on Saudi energy infrastructure
- Brent crude futures declined 1.89% to $114.51 a barrel, retreating from Friday’s spike following renewed fears of supply disruptions in the Middle East
- Houthi militants targeted Riyadh’s main airport and Saudi oil facilities over the weekend, escalating threats despite Saudi claims of intercepting drones and missiles
- Saudi authorities partially resumed operations at Riyadh’s airport Sunday after attacks caused damage, maintaining critical infrastructure amid ongoing threats
- Michael Alfaro, chief investment officer at Gallo Partners, estimated the geopolitical risk premium in oil prices at approximately $20 per barrel due to uncertainty
- Saudi Arabia plans to begin storing crude oil in Singapore from the second half of 2027 to strengthen resilience in its Asian supply chain
- U.S. Energy Department authorized the release of up to 400,000 barrels from the Strategic Petroleum Reserve to address a Louisiana refinery supply disruption
Why it matters: Oil markets face a dual pressure: immediate supply risks from Houthi attacks on Saudi infrastructure and the longer-term threat of demand erosion if prices remain elevated. With refining capacity identified as a structural vulnerability, even partial disruptions could extend into 2027, complicating global energy stability and limiting producers’ willingness to increase capital spending.
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