The day’s moves show the risk premium is being driven more by threats to infrastructure and shipping than by actual supply losses. Gulf export volumes are recovering, yet prices rose anyway. WTI outpacing Brent narrowed the spread between the two benchmarks, a sign that US crude is catching a bid as an alternative supply source. A sustained Brent price above $100 keeps the inflation pressure on central banks firmly in play, limiting the room for rate relief and weighing on fuel-importing currencies. In the near term, US inventory data and any confirmation of Russian diesel flows are the main counterweights to further escalation in the Gulf.
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More Gulf oil is reaching the market, but missiles, mines and Iran’s new playbook are keeping the fear premium firmly in the price.
Summary:
Brent settled up around 0.4% at about $106 a barrel, while WTI gained about 1% to around $95, its highest in three weeks
The Houthis hit a Saudi Aramco administrative building in Dhahran, causing a limited fire, and Yemeni forces warned that strikes on Saudi airports and oil facilities will continue
Iran said it began using new tactics to target ships about 10 days ago, aimed at keeping oil prices high, and a container ship sank south of the Strait of Hormuz after hitting a mine
The IEA said Gulf crude exports rose by about 4.4 million bpd in September to around 75% of pre-war levels, while Russian output edged up to around 8.4 million bpd
The IEA now sees world oil demand falling by about 2.6 million bpd in 2026, a slightly deeper drop than its previous forecast, with supply down nearly 6 million bpd
US inventory data from the API and EIA are each due a day later than usual after Monday’s Columbus Day holiday
Oil prices rose on Wednesday after Yemen’s Houthis struck Saudi Aramco’s headquarters city and Iran said it was deploying new tactics to target shipping and keep prices high. Brent crude futures settled up around 0.4% at about $106 a barrel. US West Texas Intermediate gained about 1% to around $95, its highest in three weeks.
Analysts attributed the gains to attacks on vessels transiting the Strait of Hormuz and to the escalating exchange between Saudi Arabia and the Iran-allied Houthis, describing the session as driven largely by fear. Iranian officials declined to detail the new strategy against ships, but one said Iran had started using different offensive tactics about 10 days ago.
Saudi Arabia’s energy ministry said the Houthis attacked an Aramco administrative building in Dhahran, causing a limited fire. The group has fired ballistic missiles and drones at the kingdom over the past week, saying it is retaliating for Riyadh’s support of Yemeni government forces. Riyadh’s international airport has been hit four times, and a strike on Saturday killed 13 people. A Yemeni military spokesperson said operations against Saudi airports and oil facilities would continue in the coming days, and warned shipping companies, civilians and workers to leave those sites.
At sea, Iran’s Revolutionary Guards Navy said a container ship carrying 2,500 containers sank south of the Strait of Hormuz after hitting a naval mine and catching fire. The previous day, the United Kingdom Maritime Trade Operations agency reported that a container ship and a tanker had been struck by unknown projectiles within the strait. US President Donald Trump repeated his view that more oil was now leaving the strait than before the war, and that the conflict with Iran would end soon.
Supply data offered a partial counterweight. In its October Oil Market Report, the International Energy Agency said crude exports from Middle East Gulf producers rose by about 4.4 million barrels per day in September, to around 75% of pre-war levels. Separate tracking data showed Gulf flows excluding Iran recovering to more than 81% of pre-war levels, led by Saudi Arabia, while Iran’s exports fell to zero under a US blockade. Analysts cautioned that more crude reaching international markets does not necessarily mean more is being produced, because some of the recovery reflects barrels diverted from regional refineries.
The IEA now expects world oil demand to fall by about 2.6 million bpd in 2026, slightly deeper than its previous forecast of a 2.5 million bpd decline, as war disruption and higher prices weigh on consumption. It sees global supply averaging around 101 million bpd this year, an annual drop of nearly 6 million bpd. Russian crude output edged up by about 65,000 bpd in September to around 8.4 million bpd, though it remains close to 900,000 bpd below a year earlier.
Russian diesel may also cap price swings. Last Friday Trump announced that Russia had agreed to supply diesel to global markets, and his administration temporarily lifted US sanctions on Russian diesel. Analysts said the expectation of increased Russian diesel exports is likely to limit sharp moves in either direction.
Attention now turns to US storage figures. Industry data from the American Petroleum Institute (out now, link above) and official Energy Information Administration data on Thursday, both a day later than usual because of Monday’s federal holiday.
This article was written by Eamonn Sheridan at investinglive.com.
