Brent tops $110 as Saudi drone strike and Houthi port attacks rattle oil markets
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The gist
Brent crude rose 1.2% to $110.11 a barrel after a deadly drone strike on Saudi Aramco's Shaybah field.
Traders are paying a large risk premium for feared supply disruptions, not current shortages.
Background
Brent crude is the international benchmark price for oil, and it has been whipsawed since a US-Iran conflict began disrupting flows through the Strait of Hormuz, a waterway carrying about 20 million barrels a day of crude and petroleum products from Persian Gulf producers such as Saudi Arabia, Iraq, Iran and the United Arab Emirates. Prices are climbing again now because attacks have moved beyond the Strait: a drone strike hit Saudi Aramco's Shaybah field, and Iran-backed Houthi militants claimed deadly strikes on the Saudi Red Sea port of Yanbu. The US ordered some diplomats and family members to leave its embassies in Saudi Arabia, and diesel shortages tied to the wars in Iran and Ukraine have pushed Washington to offer loans from an emergency heating oil reserve.
How it unfolded
- Mar 2, 2026Oil rises sharply as the US-Iran conflict disrupts Strait of Hormuz flows carrying about 20 million barrels a day.
- Apr 30, 2026Brent briefly touches above $126 a barrel as Iran war tensions raise fears of prolonged Middle East supply disruption.
- Sep 10, 2026The EIA projects Brent near $90 a barrel in the second half of 2026 as global inventories fall sharply.
- Oct 20, 2026Brent settles near $109 after an unconfirmed report on Iran war negotiations briefly knocks oil off five-month highs.
- Oct 21, 2026A drone strike on Saudi Aramco's Shaybah field kills two people though operations are unaffected; the US orders some embassy personnel to leave Saudi Arabia.
- Oct 22, 2026Brent rises 1.2% to $110.11 and WTI gains 1% to $98.12; US crude stocks fall 3.06 million barrels, far more than expected.
- Oct 25, 2026Brent for December delivery slips slightly to $115 at the week's open after closing at its highest since April.
Who’s saying what
- Analysts
- JPMorgan's model puts Brent's fair value at $94 a barrel given supply and demand, meaning the market is paying about $20 extra for the risk that supply is disrupted again.
- Expert
- Brookings economist Robin Brooks says a very large risk premium is being priced in, noting Gulf oil supply is nearly back to pre-war levels in September data he analyzed.
- Caution
- LSEG analysts say Iran is targeting tankers beyond the Strait of Hormuz, into the Gulf of Oman, jeopardizing Gulf crude loadings and ship-to-ship transfers.
- Bears
- Praetorian Capital says Ukrainian attacks on Russian refiners and the Hormuz blockade have tightened the market through supply destruction, but it exited refiner positions as demand destruction appears to accelerate.
Still unverified
An earlier report on Iran war negotiations that briefly pushed oil off five-month highs was unconfirmed, and Bloomberg reported that claims the US and Iran are close to an agreement are inaccurate.