Oil prices advanced again as persistent attacks on Saudi Arabian energy infrastructure kept supply fears at the forefront of global markets, overshadowing signals from the Trump administration about Russian crude supply. Brent crude, the global benchmark, traded at $108.04 a barrel, up $2.32 from the previous morning and roughly 70 per cent higher than a year earlier, when it stood near $63.49.
The move extends a rally that has been driven less by demand surprises than by a steady accumulation of geopolitical risk. Strikes on Saudi facilities and tanker incidents in the Middle East have reminded traders how quickly the region's exports can be disrupted. Those concerns have proved more powerful in recent sessions than any signals from Washington about Russian supply, which might otherwise have eased prices.
The Trump administration's approach to Russian energy has added a layer of uncertainty rather than clarity. Announcements about supply have been read by the market as potentially bearish, but the immediate reaction has been muted because the physical risk to Middle East flows is more tangible. Traders are weighing whether any Russian barrels freed up by policy shifts could reach global markets quickly enough to offset disruption elsewhere. So far, the answer appears to be no.
The wider context is a market that has been tightening for months. Brent has risen from around $106 a month ago and from just over $63 a year ago, a gain of more than 70 per cent. That trajectory reflects a combination of factors: restrained production from major exporters, resilient demand in Asia, and a series of supply shocks that have left inventories thinner than usual. Each new attack on Saudi infrastructure reinforces the view that the risk premium is not going away.
For consumers, the pass-through to pump prices is rarely immediate but almost always inevitable. Crude accounts for more than half the cost of a gallon of petrol, and when oil spikes, forecourt prices tend to follow quickly. When oil falls, the decline is slower — a pattern sometimes described as rockets and feathers. The result is that households and businesses feel the pain of higher crude far sooner than they enjoy the relief of lower prices.
The Strategic Petroleum Reserve remains the main short-term buffer available to the United States. Its purpose is energy security in emergencies, including sanctions, severe storm damage or war, and it can soften crippling price hikes during supply shocks. But it is not a long-term answer. Drawing on the reserve offers immediate relief to consumers and keeps critical sectors — emergency services, public transport and key industries — running, yet it does not change the underlying balance of supply and demand.
Oil and natural gas prices are also linked. A sustained rise in crude can push some industries to switch to gas where possible, increasing demand for natural gas and transmitting the shock through the wider energy complex. That matters for electricity prices, industrial costs and, ultimately, inflation.
The historical record offers little comfort. Oil has been anything but steady over the past five decades. The early 1970s brought the first major shock when Middle East producers cut exports and imposed an embargo during the Yom Kippur War. Prices fell in the mid-1980s as demand weakened and non-OPEC producers entered the market. They spiked again in 2008 on rising global demand before collapsing with the financial crisis. In 2020, pandemic lockdowns drove prices below $20 a barrel. Wars, recessions, OPEC decisions and shifting energy policies have all left their mark.
For now, the market's attention is fixed on the Middle East. As long as attacks on Saudi infrastructure continue, the risk premium is likely to stay embedded in prices, and the Trump administration's Russian supply announcements will remain a secondary consideration. The direction of travel in the coming weeks will depend on whether those attacks persist — and on whether any additional barrels can reach the market in time to matter.