October 22, 2026
Oil prices rose more than 2% on Thursday, with Brent crude climbing above $111 a barrel. Traders are weighing renewed attacks on Saudi energy infrastructure and the risk of further fighting between the United States and Iran, both of which threaten a Middle East oil supply that has been recovering.
December Brent crude futures rose 2.9% to $111.96 a barrel, while December West Texas Intermediate futures gained 2.3% to $99.40. The move followed a mixed session on Wednesday, when Brent settled little changed and U.S. crude fell as investors balanced a rebound in Gulf oil exports against continuing security risks in the region.
The most immediate concern came from Saudi Arabia. The country’s Energy Ministry said air defenses intercepted a drone aimed at a facility at Saudi Aramco’s Shaybah oil field. Falling debris killed two people and injured two others, but operations were not affected, according to the Saudi Press Agency. So far the attacks have not materially disrupted Saudi production or exports. Still, analysts at MUFG said that targeting energy facilities is keeping a substantial geopolitical risk premium in crude prices, even though the physical spreads in oil prices have narrowed in recent weeks.
Shipping remains exposed as well. The U.K. Maritime Trade Operations reported that a tanker was struck by an unidentified projectile near Oman on Wednesday, causing a fire. The crew was reported safe.
Diplomacy continues alongside the military buildup. According to The Wall Street Journal, the U.S. is preparing additional military options against Iran, while Middle East mediators are trying to revive negotiations. Washington is also moving a third aircraft carrier strike group toward the region. The U.S. has ordered nonemergency government employees and their families to leave Saudi Arabia because of continued attacks by the Iran-backed Houthi militia in Yemen.
Despite these risks, Middle East crude exports have recovered substantially. Shipments through the Strait of Hormuz and alternative routes averaged more than 24 million barrels a day in the week through October 18, above the prewar level of 23.3 million barrels a day, according to Kpler. Iran’s own supplies remain constrained by the U.S. blockade, and the Iranian crude that had been held in floating storage in Asian waters was depleted by mid-October.
In the United States, commercial crude inventories fell by 3.1 million barrels to 412.5 million barrels last week, according to the Energy Information Administration. Gasoline stockpiles also declined, while distillate inventories rose.
(Source: Dow Jones Newswires)
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