Oil prices climbed nearly 2% on Thursday after deadly attacks on Saudi Arabian targets renewed concern over Middle East supply, even as regional crude exports recovered above their pre-war average.
Brent futures gained 1.77% to $110.75 a barrel by 0442 GMT, while US West Texas Intermediate rose 1.47% to $98.58.
The contradiction is in shipping. Gulf exporters have restored volumes by changing routes and deploying additional tankers, but the cost of moving crude has surged. A vessel capable of carrying two million barrels can command about $1.4 million a day.
Investors are pricing not just current supply, but the risk that these expensive workarounds could fail.
Saudi attacks revive fears of a wider supply interruption
An attack at King Fahd International Airport in Dammam killed one person and wounded eight late Wednesday, according to Saudi authorities.
Drone debris at an Aramco-operated oilfield separately killed two workers. No interruption to Saudi oil production had been confirmed in connection with those incidents.
Washington moved to withdraw some diplomatic personnel and family members as security deteriorated. Iranian authorities also reported incidents involving vessels and mines near the Strait of Hormuz, though those claims were not independently verified.
Sophie Rasmussen, an oil and tanker analyst at Affinity Shipping, warned in the company’s October 20 market report that repeated ship attacks and threats to Saudi infrastructure were adding pressure to an already strained transport network.
The immediate concern is not how much oil is being pumped. It is whether another strike on a terminal, pipeline or tanker corridor could reverse the shipping recovery.
Gulf exports recover, but tanker costs reach extraordinary levels
Kpler estimates that Middle Eastern crude exports averaged 17.3 million barrels a day in October, above the 16.9 million average before the conflict began.
Flows through Hormuz recovered to 11.7 million barrels daily, although they remain below normal.
Producers have diverted more crude through pipelines and Red Sea terminals, while protected convoys and ship-to-ship transfers have helped maintain Gulf shipments.
That resilience is expensive, as large-tanker charter rates on the Middle East-to-China route approach $1.4 million daily, more than 12 times pre-war levels. Insurance can cost around 10% of cargo value, compared with roughly 3% previously.
ING commodity strategists linked record freight charges to increasingly inefficient tanker use.
More shipments require detours, escorts or additional handling, raising delivered costs. A recovery in export volumes is therefore not the same as a return to normal oil trade.
US inventories tighten even as Goldman Sachs sees $90 Brent
US commercial crude stockpiles fell 3.06 million barrels last week to 412.5 million, according to the Energy Information Administration, exceeding forecasts for a smaller draw.
Gasoline stocks declined about three million barrels, although distillate inventories unexpectedly increased 1.68 million.
Those figures reinforce immediate supply concerns but do not guarantee that prices will keep rising.
Daan Struyven, Goldman Sachs’ head of oil research, argued that improving Gulf exports and slower demand could eventually push the market into surplus.
Goldman forecasts Brent at $90 by December and an average of $80 in 2027, assuming the supply recovery continues.
The bank also estimates a geopolitical premium near $25 in physical spot Brent , which should not be applied directly to the futures contract.
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