Oil rises as US orders diplomats to leave Saudi Arabia amid escalating tensions

By Arathy Somasekhar

Oct 22 (Reuters) - Oil prices rose on Thursday as more attacks by the Houthis in Saudi Arabia prompted the United States to order some diplomats and family members to leave its missions in the Kingdom.

Brent crude futures rose $1.29, or 1.2%, to $110.11 a barrel at 00:34 GMT, while US West Texas Intermediate crude gained 97 cents, or 1%, to $98.12. Brent had settled largely unchanged on Wednesday, while WTI had eased 67 cents. 

The US State Department plans to withdraw family members from a number of other US missions in the region, US officials told Reuters. 

Yemen's Iran-aligned Houthis struck several targets on Wednesday with at least one person killed and eight more wounded at a civilian airport in Dammam, and two people killed in a drone attack on a Saudi oil field.

Explosions were also heard in Sirik in southern Iran, Iranian media reported on Wednesday, saying the nature and origin of the explosions were unknown.

On Wednesday, Iran's Foreign Minister Abbas Araqchi told the Financial Times that Iran was fully prepared to defend itself and President Masoud Pezeshkian told state media the US could not expect dialogue while blockading and threatening Iran.

There were at least 18 attacks on shipping over the past two weeks, Kpler data showed, while LSEG analysts warned that Iran was targeting tankers well beyond the Strait of Hormuz, reaching into the Gulf of Oman and jeopardising Gulf crude loadings and ship-to-ship transfers supporting regional loadings.

Meanwhile, Russian President Vladimir Putin hosted US Special Envoy Steve Witkoff in St Petersburg on Wednesday for talks on ending the war in Ukraine amid Washington's latest push to stop Europe's bloodiest conflict since World War Two.

The Kremlin said Putin had agreed to resume US-mediated peace talks with Ukraine as soon as next month. Ukrainian President Volodymyr Zelenskiy said he supported the talks and hoped they would start as soon as possible.

US crude stocks fell by 3.06 million barrels to 412.5 million barrels last week, the US Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for an 820,000-barrel draw.

Distillate stockpiles, which include diesel and heating oil, rose 1.68 million barrels in the week to 104.3 million barrels, versus expectations for a 1.16 million-barrel drop, EIA data showed.

The Trump administration is offering to loan up to nearly a third of the 1-million-barrel US emergency heating oil reserve, the Department of Energy said on Wednesday, seeking to contain prices that have surged on diesel shortages due to the wars in Iran and Ukraine.

(Reporting by Arathy Somasekhar; Editing by Kate Mayberry)