Oil Prices Hold Amid Middle East Uncertainty

Oil prices remained range-bound on Wednesday as traders balanced profit-taking against ongoing concerns over energy supply security in the Middle East and Russia. Brent crude fell to below $106 a barrel, while West Texas Intermediate (WTI) recorded a marginal gain. The session was characterized by cautious positioning as investors awaited developments from high-stakes conflicts in the region. Saudi Arabia intercepted additional missiles and drones from Yemen's Houthis, with fighting against Iran-backed militants showing no signs of abating. Analysts are closely watching whether the violence could disrupt oil shipments from the world's largest oil exporter. Meanwhile, Iranian attacks on vessels in the Strait of Hormuz have intensified, threatening the recent recovery in Persian Gulf oil exports. Crude prices have surged over 70% this year due to Middle East supply disruptions, with oil derivatives like diesel seeing even sharper gains. In an attempt to curb rising prices, US President Donald Trump announced a controversial deal involving Russian diesel and a ceasefire between Moscow and Kyiv. However, the agreement has sparked skepticism, with both sides reportedly not fully committing to the terms. Russia's crude shipments have also slowed as security concerns at its key Black Sea port persist. A Houthi attack on Riyadh's main airport over the weekend resulted in at least 16 deaths, including a US citizen, and over 300 injuries. Trump has indicated he may support Saudi-led strikes against the Yemen-based group. Analysts warn that while current attacks have not significantly impacted oil exports, the potential for retaliation could escalate tensions. Saudi Arabia is working to diversify its oil export routes, with plans to increase export capacity via repurposed gas pipelines. The kingdom has also restored critical Red Sea pipeline operations after drone attacks. Despite ongoing disruptions, crude output has rebounded to levels not seen in over three decades, according to OPEC reports.