Oil prices climbed towards $107 a barrel on Wednesday, as fresh attacks on tankers in the Strait of Hormuz and Saudi Arabian energy infrastructure threatened the recovery of Gulf exports, raising concerns over further increases in fuel costs in Cyprus.
International benchmark Brent crude rose to $106.03 a barrel in early trading, recovering from Tuesday’s 0.9 per cent decline, while US West Texas Intermediate (WTI) increased to $94.42, according to Reuters.
The increase followed renewed Iranian attacks on commercial vessels passing through the Strait of Hormuz, alongside strikes by Yemen’s Iran-aligned Houthi movement against Saudi Arabia, including a facility belonging to state oil company Saudi Aramco.
The developments have renewed uncertainty over the recovery of oil shipments from the Persian Gulf, despite recent improvements in production and exports.
Brent has gained more than 70 per cent since the beginning of 2026, as the conflict involving the United States and Iran continues to disrupt energy supplies and maritime transport.
For Cyprus, the latest increase comes as fuel prices continue to weigh on motorists and business, with the Consumer Protection Service’s latest published figures putting average unleaded 95 petrol at €1.757 per litre and diesel at €2.022.
Heating oil averaged €1.678 per litre, while diesel reached as much as €2.126 at the most expensive petrol station in Limassol.
The pressure on consumers has been building for months, with the Cyprus consumers association previously estimating that fuel price increases cost households and businesses an additional €23 million between March and August.
Meanwhile, the latest attacks in the Gulf have complicated efforts to restore confidence in one of the world’s most important oil transport routes.
According to the United Kingdom Maritime Trade Operations (UKMTO), an oil tanker and a container ship were struck by unidentified projectiles on Tuesday while passing through the Strait of Hormuz.
Iranian officials subsequently told Reuters that Tehran had introduced new tactics around 10 days earlier, increasing the frequency of attacks against vessels it considers to be violating restrictions on passage through the waterway.
The operations have also extended towards the Gulf of Oman and waters near Qatar and the United Arab Emirates, increasing concerns over the safety of commercial shipping.
As a result, more supertanker operators are avoiding the Persian Gulf, threatening to slow the recovery in crude exports and adding to freight and insurance costs.
The risks have particular relevance for Cyprus’ maritime services sector, with shipmanagement companies based in Limassol exposed to higher operating costs and additional safety requirements.
Earlier this month, the Dynacom-managed tanker Lipsi, controlled by Greek shipowner George Prokopiou, was struck by an unidentified projectile in the Strait of Hormuz, damaging its engine room and leaving the vessel disabled.
The incident was followed by an attack on the Greek-flagged LNG carrier Maran Gas Mystras, operated by the Angelicoussis Shipping Group, which remained operational and continued its voyage.
Despite the security threats, Gulf oil production has begun to recover, offering some relief to international markets.
According to figures submitted to OPEC, Saudi Arabian crude production increased by more than 2 million barrels per day in September, reaching 8.372 million barrels daily, although output remains below pre-war levels.
Overall production among OPEC and its allies rose by approximately 900,000 barrels per day to 39.07 million, reflecting efforts to restore supplies following months of disruption.
However, the recovery remains vulnerable to further attacks, particularly after the latest Houthi strikes against Saudi infrastructure.
An administrative facility belonging to Saudi Aramco in Dhahran was hit, causing a limited fire, although no interruption to oil production or exports has been confirmed.
The attack followed further missile and drone strikes against Saudi Arabia, including its main international airport in Riyadh, raising concerns over an expansion of the conflict.
US president Donald Trump also raised the possibility of involving Turkish president Recep Tayyip Erdogan in efforts to respond to the Houthi attacks.
The continuing uncertainty has prompted financial institutions to revise their oil price forecasts.
Morgan Stanley raised its fourth-quarter Brent forecast to $105 a barrel, citing tight physical supplies, higher freight costs and geopolitical risks. The bank also increased its forecasts for physical Dated Brent by $5 a barrel for the current and following quarters.
Meanwhile, OPEC expects global oil demand to increase by 2.55 million barrels per day in 2027, reaching approximately 108.3 million barrels daily, partly reflecting the need to replenish inventories depleted during the conflicts in the Middle East and Ukraine.
At the same time, increased Russian diesel exports could provide some relief to international fuel markets.
Trump has defended arrangements allowing additional Russian diesel supplies to reach buyers, arguing that greater availability could help contain prices, despite criticism from Republican lawmakers over the implications for sanctions against Moscow.
Nevertheless, concerns over the security of Gulf shipments continue to dominate trading, particularly as crude exports recover without a corresponding improvement in maritime safety.
In Cyprus, the prolonged period of high oil prices has already prompted government measures to ease household energy costs.
The €70 million cost-of-living package, announced in September, includes a reduction in heating oil excise duty from 7.4 cents to 2.1 cents per litre from November 1, alongside extended electricity subsidies and other support measures.
However, sustained increases in international oil prices could limit the benefits of these measures, particularly if higher import costs are passed on to consumers.
Cyprus remains dependent on imported petroleum products, leaving fuel prices sensitive to international market movements, transport costs and fluctuations in the euro-dollar exchange rate.
Higher crude prices do not translate immediately into increases at petrol stations, as domestic prices also depend on refined fuel costs and the timing of new shipments.