Oil climbed 3% as Saudi missile attacks counter phased Hormuz talks

Global crude futures rose roughly 3% on Thursday to a one-week high after Houthi missile strikes on Saudi Arabia rekindled supply fears, though prices pared a 5% intraday surge on reports of phased US–Iran talks.

Gains were driven by Saudi air defences intercepting six Houthi ballistic missiles targeting the Yanbu export hub and Taif province, while commercial tanker loadings at Yanbu have yet to resume. Friction escalated further as the UAE and Oman barred Iranian commercial flights under expanded US secondary sanctions, triggering threats of retaliation from Tehran.

However, steeper gains were checked after reports revealed US and Iranian negotiators in New York are discussing a phased compromise to reopen the Strait of Hormuz in exchange for easing Washington's economic blockade, though negotiations remain constrained by tactical posturing.

Underlying support was reinforced by persistent global diesel shortages stemming from Russian export bans and Middle Eastern refinery outages, which continue to distort refinery yields and sustain heavy feedstock cost-push pressure on petrochemical crackers.