Oil prices rose on Monday after a drone attack on U.S. forces in Jordan added to supply disruption concerns in the Middle East and Houthi militants stepped up attacks in the Red Sea.

Brent crude futures gained 21 cents to $83.76 a barrel by 1117 GMT while U.S. West Texas Intermediate crude futures edged up by 21 cents to $78.22.

Risks of widening conflict in the Middle East are burgeoning, with a drone strike by Iran-backed militants on U.S. troops in Jordon last weekend.

Commodities trader Trafigura, meanwhile, is assessing the security risks of further Red Sea voyages after firefighters put out a blaze on a tanker attacked by Yemen’s Houthi group a day earlier.
“We believe the death of three U.S. service members today in Jordan marks a critical inflection point in the ongoing conflict in the Middle East,” RBC Capital analyst Helima Croft said, adding that a more direct confrontation with Iran heightened the risk of regional energy supply disruptions.
ANZ analysts said: “Disruptions to supply have been limited, but that changed on Friday after an oil tanker operating on behalf of Trafigura was hit by a missile off the coast of Yemen.”
In China, meanwhile, a Hong Kong court on Monday ordered the liquidation of property giant China Evergrande Group (3333.HK), opens new tab in a sign of a deepening crisis in China’s real estate sector, knocking sentiment on crude demand in the world’s largest oil importer.

Lingering high interest rates in Europe are also on investors’ radar after the European Central Bank policymakers were unable to reach a consensus on Monday over when interest rates should be cut.
Russia, meanwhile, is likely to cut exports of naphtha, a petrochemical feedstock, by between 127,500 and 136,000 barrels per day – about a third of its total exports – after fires disrupted operations at Baltic and Black Sea refineries, according to traders and LSEG ship-tracking data.

Another Russian oil facility came under attack on Monday, with Russian authorities indicating they had thwarted a drone attack on the Slavneft-YANOS refinery in the city of Yaroslavl.

Source Reuters