Oil prices eases as Saudi supply recovery offsets Houthi attacks, US-Iran tensions

Oil prices rise above $100 a barrel as attacks on Middle East energy and shipping infrastructure deepen supply concerns.

Oil prices fell on Monday as investors focused on signs of a recovery in Saudi Arabian crude shipments, even as attacks by Yemen's Iran-backed Houthis added to tensions in the Middle East and the US and Iran remained locked in a stalemate.Brent crude futures fell 81 cents, or 0.78%, to $103.06 a barrel at 0031 GMT, after settling 0.91% lower on Friday.US West Texas Intermediate (WTI) crude was down 89 cents, or 0.89%, at $99.41 a barrel, following a 1.58% decline in the previous session.The decline came despite fresh attacks claimed by the Houthis. The group said it had targeted "sensitive" sites in Saudi Arabia's capital Riyadh with missiles and drones on Saturday, as well as an Aramco facility in Yanbu, a key oil export hub on the Red Sea.Houthi attacks on Saudi Aramco's East-West pipeline have disrupted some shipments through Yanbu. In response, Aramco has increased exports through the Strait of Hormuz this month and next, according to traders cited by Reuters.The shift has helped Saudi exports recover to just over 4 million barrels per day (bpd) so far in September, after falling to 2.4 million bpd in August, the lowest level since at least 2013, according to provisional data from analytics firm Kpler.

"Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia's East-West pipeline," JPMorgan analysts said in a note. They said total oil flows had averaged 17.1 million bpd over the previous 10 days, about 6.1 million bpd below the 2025 average."The most notable pivot has come from Saudi Arabia," the analysts added, noting that satellite data showed Saudi oil flows through the Strait of Hormuz averaging 2.9 million bpd over the previous six days, up sharply from 700,000 bpd in August.China has asked Iran to help rein in the Houthis following an appeal from Saudi Arabia after the attacks, according to three Iranian sources familiar with the matter.Meanwhile, Iran and the US exchanged fresh threats on Sunday as efforts to break the stalemate showed little progress. US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to travel to New York this week for the United Nations General Assembly.Iran has also conveyed conditions to mediators for resuming negotiations aimed at ending the conflict with the US, Al Jazeera reported, citing Iran's security chief Mohsen Rezaei.Asian shares edged higher on Monday, helped by gains in chipmakers as demand for artificial intelligence technology continued to support the sector. Oil prices eased as expectations of stronger Saudi supplies outweighed concerns over the latest Houthi attack.Trading was relatively thin, with Japan's markets closed for the Silver Week holiday through Wednesday. The dollar was steady at 157 yen, while investors remained cautious about possible intervention by Japanese authorities to support the currency.Japan's Nikkei was closed, although futures rose 0.5%. South Korea's tech-heavy index gained 1.1%, while MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%.S&P 500 futures rose 0.3% and Nasdaq futures gained 0.4%. In Europe, EUROSTOXX 50 and DAX futures were up 0.2%, while FTSE futures were flat.Bond markets remained under pressure after a sharp selloff pushed US two-year Treasury yields up 36 basis points over the past two weeks to 4.7604%, their highest level since mid-2024.