Oil prices were little changed in early Asian trading on Friday after a sharp rally pushed Brent crude to a five-month high, as investors weighed persistent supply risks in the Middle East against the possibility that global oil flows could remain resilient. Renewed Houthi attacks on Saudi Arabia, one of the world’s largest oil exporters, have heightened concerns about energy infrastructure and shipping security, keeping geopolitical risk firmly in focus across commodity markets.

Brent and WTI Pause After a Sharp Rally

Brent crude futures edged down 0.2% to $112.96 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 0.3% to $98.12. The modest pullback followed a roughly 4% jump in Brent during Thursday’s session, reflecting a rapid reassessment of the risks to regional oil supplies.

Despite Friday’s slight declines, Brent was on course for a third consecutive weekly gain. WTI, by contrast, was set to end a two-week advance with a weekly decline. The divergence highlights how the two benchmarks can respond differently to regional supply concerns, market positioning and expectations for crude availability.

The recent rally also suggests that traders are incorporating a higher geopolitical risk premium into prices. Even without a confirmed, sustained reduction in production, the possibility of attacks disrupting exports can push crude higher as market participants account for potential shortages.

Attacks on Saudi Arabia Intensify Supply Concerns

The latest escalation followed Houthi attacks on targets in Saudi Arabia, including a civilian airport in Dammam and an oil field. The incidents heightened concerns about the security of the country’s energy infrastructure and prompted Saudi Aramco to evacuate its headquarters in Dhahran.

Saudi Arabia plays a central role in global oil supply, making any threat to its production facilities or export infrastructure particularly significant for energy markets. A prolonged disruption could tighten available supplies and increase costs for refiners, transport companies and other energy-intensive businesses.

However, the market impact will depend on whether the attacks cause lasting damage or interrupt actual production and exports. If facilities continue operating and shipments remain stable, prices could retreat as immediate supply fears ease. Continued attacks or damage to critical infrastructure could instead sustain the current risk premium.

Libya Adds Another Source of Supply Uncertainty

Supply concerns are not limited to the Arabian Peninsula. A pipeline shutdown in Libya reduced output from the Hamada and Tahara oil fields, adding another source of uncertainty to an already sensitive global market.

The combination of geopolitical tensions and localized production disruptions leaves oil prices vulnerable to further swings. Higher crude prices can feed into transportation and manufacturing costs, complicating the outlook for inflation and potentially limiting central banks’ flexibility if energy costs remain elevated.

For investors, the next signals will come from developments around Saudi energy infrastructure, the duration of Libya’s pipeline disruption and changes in actual export volumes. Whether Brent remains near its recent highs will depend on how these risks evolve and whether supply disruptions become more substantial than the market currently anticipates.