US Oil Prices Surge as Storm Looms Over Gulf of Mexico

Brent crude oil prices surged past $101 a barrel on Wednesday. Driven by fresh supply risks in Saudi Arabia and the US oil and refining sector. The latest concerns emerged from both sides of the global oil supply chain.

With a storm developing in the Gulf of Mexico expected to become the first Atlantic hurricane of 2026 within two days and impact oil and gas facilities.

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According to US forecasters, the storm's path accounts for 15% of US crude production and 5% of the country's natural gas production. Six refineries could also be affected, with refineries in US Gulf states representing about 50% of the country's total refining capacity of 18.2 million barrels per day.

Saudi energy minister Prince Abdulaziz bin Salman on, Tuesday said. that supply had been rising. With the East-West pipeline reaching 5.8 million barrels a day.

However, tensions around Saudi Arabia have added another risk to regional supply, with airports in Jazan and Najran attacked twice on Monday evening as hostilities between Saudi Arabia and Yemen's Iran-backed Houthis escalated.

US President Donald, Trump said. on Tuesday that there was uncertainty over who was running Iran during the eight-month US-Israeli war with Iran. "Their leaders are gone, their second group of leaders are gone, and the biggest problem I have is nobody knows who the hell is running the country," Trump said.

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US inventory data, however, offered a mixed picture, with crude and gasoline inventories declining last week, while distillate stocks increased marginally. US crude inventories fell by 2.09 million barrels in the week ended October 2.

Mukesh Sahdev, chief oil analyst at X Analysts in Sydney, said the attacks and refinery outages could continue to support higher oil prices. "Attacks and refinery outages are likely to keep the cracks elevated and scarcity will transmit to crude. Prices will stay elevated near a $100 level without any material de-escalation emerging," Sahdev said.