TLDR
- Brent crude fell about 2% to near $114 a barrel on Monday after its highest close since April 29.
- West Texas Intermediate dropped to about $101 as Qatari mediators traveled to Tehran.
- Houthi attacks on Saudi Arabia continued over the weekend, keeping supply risks high.
- An analyst says geopolitical uncertainty adds about $20 a barrel to oil prices.
- The U.S. approved a release of up to 400,000 barrels from the Strategic Petroleum Reserve.
Oil prices fell on Monday as diplomatic efforts to ease the war involving Iran calmed some supply fears. Brent crude futures for December dropped 2% to $114.39 a barrel.
U.S. West Texas Intermediate futures fell 2.3% to $100.88 a barrel. The drop followed a sharp rally on Friday.
Both benchmarks had climbed nearly $3 on Friday after attacks by Yemen’s Houthi movement. The attacks raised concerns about the security of energy sites in Saudi Arabia.
Houthi Attacks Keep Saudi Arabia on Alert
Brent settled at $116.72 a barrel on Friday, its highest close since April 29. It gained about 6% over the week.
WTI settled at $103.27, up 2.3% for the week. Saudi Arabia is the world’s largest oil exporter.
The Houthis said they targeted Saudi Arabia’s main airport in Riyadh and oil facilities on Saturday. Saudi authorities said on Sunday they had intercepted more missiles and drones.
The kingdom partly resumed operations at the airport on Sunday despite earlier damage. The Houthis have threatened further strikes.
The Houthis have also pushed toward the Bab el-Mandeb Strait, a chokepoint linking the Red Sea with the Gulf of Aden. Security in the area has worsened.
Libya’s National Oil Corporation said last week that a pipeline valve serving the Hamada and Tahara oilfields was shut. Output at both fields fell.
Analysts Weigh Risk and Demand
Michael Alfaro, chief investment officer at Gallo Partners, told CNBC that uncertainty adds about $20 a barrel to oil prices. He said Brent above $120 to $140 would likely lead to more demand destruction.
Alfaro called refining capacity “the real challenge.” He warned the problems could last into 2027 and beyond.
U.S. producers are adding some rigs, he said, but are not raising spending much. Companies remain cautious because of volatile prices.
The Energy Department on Friday approved releasing up to 400,000 barrels from the Strategic Petroleum Reserve. The move addresses a supply disruption at a Louisiana refinery.
Energy ministers from Saudi Arabia and Singapore said Saudi Arabia plans to store crude oil in Singapore from the second half of 2027. President Donald Trump told Fox News on Sunday it was “getting to be decision time” on a deal with Tehran or to “finish it off.”
Qatari mediators traveled to Tehran on Sunday, working with Washington. Reuters reported that senior officials from Saudi Arabia, Turkey and Pakistan were set to meet Iranian counterparts there on Monday.
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