Oil prices have risen sharply following renewed attacks on energy infrastructure in Saudi Arabia, adding further uncertainty to global energy markets as tensions across the Middle East continue.
The latest attacks by Yemen’s Iran-aligned Houthi group targeted several locations in southern Saudi Arabia, including energy facilities. The developments come at a time when global oil markets are already facing disruption linked to wider tensions between the US and Iran, raising concerns about the security of energy supplies and key shipping routes.
Oil Prices Move Towards $100 a Barrel
Following the attacks, Brent crude – the international benchmark for oil prices – rose to $98.25 per barrel on the morning of 8th September, an increase of around 1.3% following the overnight strikes. Prices had already been rising in the days before the attacks, with Brent trading above $97 per barrel on 7th September.
One of the locations affected was Jazan, an important industrial city on Saudi Arabia’s Red Sea coast. Its oil facilities can process up to 400,000 barrels per day, making disruption in the area significant for international markets.
Saudi Arabia is one of the world’s largest oil producers and exporters, meaning developments affecting its energy infrastructure can quickly influence market expectations. However, the extent and duration of any disruption remains uncertain.
Oil markets also remain sensitive to developments around the Strait of Hormuz. Before the current conflict, around 21.6 million barrels of crude oil and petroleum products passed through the route each day, according to figures cited from the US Energy Information Administration. Tanker movements have since been disrupted, contributing to concerns around global supply.
Why Are Oil Prices Rising?
The recent increase reflects more than the physical impact of individual attacks. Markets also price in the possibility that conflict could cause wider or longer-lasting disruption to production and shipping.
This can create what is known as a geopolitical risk premium, where prices rise because traders see a greater risk to future supplies, even before a significant shortage occurs.
The situation is also being influenced by production decisions from OPEC+. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman recently agreed to maintain September production levels through October, meaning there is currently no additional supply increase planned from the group to offset disruption.
At the same time, higher prices can eventually reduce demand if they begin to place greater pressure on consumers and businesses. This means the direction of the oil market will continue to depend on a combination of geopolitical developments, physical supply and global demand.
What Could This Mean for the UK?
Although the UK is less directly dependent on oil from the Gulf than some other economies, oil is traded internationally. This means changes in global prices can still affect UK businesses and consumers.
The most immediate impact is likely to be seen in petrol and diesel prices if higher crude costs are sustained. The Bank of England expects motor fuels to contribute around 0.3 percentage points to inflation during the second half of 2026.
For businesses, the effects can extend beyond the cost of filling vehicles. Higher diesel prices can increase costs across haulage, deliveries, construction and agriculture, with some of these increases potentially feeding through into the wider cost of goods and services.
The outlook remains uncertain and will depend heavily on how the situation in the Middle East develops. Further disruption to Saudi energy infrastructure or major shipping routes could maintain upward pressure on oil prices. Equally, an easing of tensions or improvement in supply conditions could reduce some of the risk currently priced into the market.
For UK businesses, the latest movement is another reminder of how quickly geopolitical events can influence global energy markets. With Brent approaching $100 per barrel and uncertainty continuing across the region, market conditions are likely to remain closely watched throughout the remainder of 2026.
