Oil price surge rattles markets
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The gist
Brent crude hit $113 a barrel Thursday after a deadly drone strike on Saudi Aramco's Shaybah field.
Higher energy costs are feeding through to producer prices and shipping rates worldwide.
Background
Saudi Aramco is the Saudi state oil company; its Shaybah field was hit by a deadly drone strike, and a separate attack on King Fahd International Airport in Dammam killed one person. Global oil markets have been repeatedly roiled by the war in the Middle East since February, with attention on Gulf crude availability and traffic through the Strait of Hormuz, a key passage for oil shipments. Shipping costs had already risen after Russia's full-scale invasion of Ukraine reshuffled global crude trade, and the so-called shadow fleet used to circumvent sanctions has shrunk the pool of ships available.
How it unfolded
- Sep 2026Tanker rates surged to historic highs; Bank of Korea reported producer prices rose 7.7% year-on-year in September, with coal and petroleum products up 53.6%.
- Oct 16, 2026Crude closed up 3.51% at a one-month high; US lawmakers introduced a bill to block President Trump's deal with Russia to release several hundred million barrels of diesel fuel.
- Oct 19, 2026November WTI crude closed up 2.22% at a five-week high, while November RBOB gasoline fell 1.36%.
- Oct 21, 2026The Bank of Korea said producer prices rose 7.7% year-on-year in September, slowing from August's 7.9%.
- Oct 22, 2026Brent pushed to $113 a barrel after a deadly drone strike hit Saudi Aramco's Shaybah field, leaving operations unaffected, and an attack on King Fahd International Airport in Dammam killed one. US stocks fell sharply, led by tech, and the 10-year Treasury yield dropped 11 basis points to 5.02%.
Who’s saying what
- Analysts
- Goldman Sachs estimates a $24-a-barrel risk premium in crude due to the Middle East conflict, and says fair value could fall about $11 a barrel if Europe releases half the diesel it has announced from reserves.
- Analysts
- Mahmoud Mashal of VT Markets Dubai said WTI and Brent were rising intraday as escalating Middle East tensions revived concerns over Gulf supply, with Strait of Hormuz traffic still restricted.
- Analysts
- Naeem Aslam of Zaye Capital Markets said the renewed increase reflects concerns about supply disruptions, geopolitical uncertainty and tightening global petroleum inventories.
- Official
- US Energy Secretary Wright said Persian Gulf oil flows have recovered to about 80% of their pre-war level, though refined-product shipments remain constrained.
- Party
- Iran said it has no choice but to assert control over the Strait of Hormuz, saying the strait belongs to Iran and the US must pay the price for the current situation.
Still unverified
Oil prices reportedly whipsawed on a Wednesday following an unsubstantiated report of a potential Qatar-Pakistan peace proposal; prices also reportedly rose amid reports of detailed plans for renewed strikes against Iran after the US midterm elections.