Oil Prices Climb After Reported Missile Strike on Saudi Refinery Raises Supply Fears

Global crude oil prices rose on Wednesday after Yemen's Iran-aligned Houthi group reportedly targeted Saudi Arabia's largest oil refinery with a missile, renewing concerns over potential disruptions to energy supplies from the Middle East.

Brent crude futures for December delivery climbed $1.55, or 1.36 per cent, to $115.43 a barrel, while US West Texas Intermediate (WTI) crude gained 1.43 per cent to $101.32 a barrel.

The Houthis claimed responsibility for targeting the refinery, reviving market concerns about the security of critical oil infrastructure in the region. Saudi authorities, however, had not confirmed the reported strike on the facility, which has a processing capacity of 550,000 barrels per day.

The price increase reversed part of the previous session's decline, when crude benchmarks fell by nearly $2 a barrel. Oil prices had come under pressure as diplomatic efforts to ease regional tensions raised hopes of avoiding supply disruptions, while expectations of rising US crude inventories added to the downward pressure.

In a bid to ease tensions, representatives from Saudi Arabia, Turkey and Pakistan reportedly held talks with Iranian officials in Tehran. The four countries agreed to continue dialogue aimed at strengthening cooperation on peace and regional security.

Despite the diplomatic engagement, uncertainty over the conflict and its implications for energy supplies continued to weigh on market sentiment.

Meanwhile, the OPEC+ group of oil-producing nations is expected to keep its December production targets unchanged at a meeting scheduled for Sunday, according to multiple reports. Output from most of the group's seven core producers, including Saudi Arabia, Russia and Iraq, remains below their respective targets.

Saudi Arabia is the world's second-largest crude oil producer and its biggest oil exporter, making the security of its production and refining infrastructure particularly important for global energy markets.

The wider West Asian conflict has also heightened concerns over shipping through the Strait of Hormuz, a critical maritime chokepoint that handled around 20 per cent of global energy shipments before hostilities escalated in February.

Iranian attacks on oil tankers near the strait pushed Brent crude above $117 a barrel last week, its highest level since April. Prices briefly revisited the $117 mark on Monday before retreating, underscoring the market's sensitivity to developments affecting regional supply routes.

The latest reported strike has added to concerns that further escalation could disrupt oil production, refining operations or maritime transport, potentially keeping crude prices volatile in the days ahead.