Crude Oil Prices Jump to Five-Week High as Middle East Conflict Threatens Supply Routes

November West Texas Intermediate crude oil futures rose $2.25, or 2.22%, on Monday to reach a five-week high. The rally came as escalating conflict in the Middle East and ongoing drone strikes on Russian energy infrastructure intensified fears of global crude supply bottlenecks. Meanwhile, gasoline prices slipped on the same day.

Shipping security in the Persian Gulf and Red Sea has deteriorated significantly, driving Middle East to China tanker shipping costs to a record $1.4 million per day. Iranian threats to restrict navigation through the Strait of Hormuz, combined with Houthi rebel drone and missile attacks on Red Sea ports such as Yanbu in Saudi Arabia, have severely threatened major crude transport channels. In response, crude supplies face a projected global deficit of 1.7 million barrels per day this year, even as high prices temper broader demand.

Investors should watch whether Persian Gulf shipping flows continue recovering toward pre-conflict levels and if OPEC+ maintains planned output targets. Offsetting supply risks, Saudi Arabia raised its September production to 8.732 million barrels per day and discounted crude pricing to Asian buyers. Additionally, US crude inventories remain 2.4% below five-year seasonal averages, leaving market balances sensitive to further military escalations or strategic reserve releases.