Brent just topped $111 as Houthis claim strikes on Saudi oil sites — Riyadh stays silent

LONDON — Oil prices climbed on Tuesday, with Brent crude futures touching $111.05 a barrel — the highest since May — as traders priced in a geopolitical risk premium from Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf, Reuters reported.

Yemen's Houthi movement said Monday it had launched several attacks on Saudi energy, airport and military targets, including an Aramco site in the Red Sea port of Yanbu, the Shaybah oilfield, King Khalid International Airport in Riyadh and Abha airport. Military spokesman Yahya Sarea said six attacks were carried out in 48 hours in response to more than 200 Saudi air and missile strikes on Sanaa and other Houthi-held areas.

Saudi authorities did not immediately confirm the claims, and Reuters said it could not independently verify them. A claimed strike, as analysts note, does not by itself establish that a missile reached its target, caused damage or disrupted operations.

The escalation goes beyond Saudi Arabia. On Monday, a Houthi missile strike on a Yemeni government training camp in Shabwa province killed more than 50 people and injured more than 200, according to Reuters. On Sunday, Iran's Revolutionary Guards said an oil tanker caught fire and exploded after striking a naval mine in the southern Strait of Hormuz, according to Iranian media — and the IRGC said Monday that Tehran had not yet completely closed the strait and could expand the blockade to the Bab al-Mandeb Strait and the Suez Canal.

Shipping data underscores the market's nerves: analytics firm Kpler said crude flows through the Gulf fell to a seven-day average of about 8.5 million barrels per day last week, down from more than 20 million the week before, with at least 10 confirmed incidents involving commercial vessels.

The moves were sharpest early Tuesday. By 0810 GMT, Brent was trading around $110.80, up about 1.1 per cent on the day, while U.S. West Texas Intermediate touched $104.94 — its highest since September. ING analysts said Tuesday the market was "pricing in a significant risk premium, given the situation's volatility."

The turmoil is also hitting boardrooms: Saudi Arabia's Future Investment Initiative — the "Davos in the Desert" gathering of bankers and chief executives due to open in Riyadh on Oct. 26 — was postponed to 2027. The Washington Post and The National both linked the decision to weeks of Houthi strikes, including a weekend attack on Riyadh's main airport that the Post says killed 13 people.

What it means for Canada

Canada is caught in the same price squeeze it faced on Friday, when Brent first touched $110: higher crude means higher pump prices just as the Bank of Canada prepares its Oct. 28 rate decision. Money markets are betting the bank will hold at 2.25 per cent next week while pricing in a hike in December, according to Reuters — a bet that gets riskier every time energy prices jump. The September CPI report, at 3.1 per cent with softer core readings, showed headline inflation driven almost entirely by gasoline.