Oil Rebounds as Middle East Disruptions Keep Supply Risks Elevated

what happened

Dow Jones Newswires reported that oil futures turned higher on Monday as traders continued to price in risks to Middle East supply. December Brent advanced 2% to $106.84 a barrel, while December West Texas Intermediate added 2% to $92.80. Both contracts had been lower earlier. Brent briefly moved past $105.50 after strikes hit Riyadh’s international airport, before giving back that gain.

Saxo Bank said Moscow’s decision to ease part of its diesel-export restrictions was exerting modest pressure on prices. On Sunday, U.S. President Trump said Russia and Ukraine had reached an understanding to halt attacks on one another’s energy facilities, though Moscow has not confirmed it. The statement came after Friday’s arrangement with Russian President Vladimir Putin, under which Russia would send over 300,000 metric tons of diesel to U.S. and international buyers, with a further 500,000 tons planned for November.

Those potential Russian cargoes could ease fuel shortages, but their effect will depend on whether Ukraine keeps striking Russian oil infrastructure, Commonwealth Bank of Australia commodities analyst Vivek Dhar wrote in a research note. Goldman Sachs lifted its December Brent projection to $90 a barrel from $85. The bank said geopolitical tensions were adding more than $20 a barrel and that its baseline outlook does not include a rapid end to the U.S.-Iran conflict.

Saudi Arabia’s General Authority of Civil Aviation said weekend attacks hit King Khalid International Airport in Riyadh, leaving at least 12 people dead and hundreds wounded. Iran-supported Houthi militants said in social-media posts that they carried out the strikes. Oil-tanker attacks also persisted over the weekend. Kpler data showed confirmed flows through the Strait of Hormuz averaged 10.5 million barrels per day in the seven days to Oct. 10, roughly 38% below prewar volumes. The preliminary figure excludes Iranian-origin cargoes and may be revised higher. Saudi Aramco Chief Executive Amin Nasser warned Monday that pressure on worldwide energy supplies would grow until the waterway fully reopened.

why it matters

The market is balancing a possible increase in Russian diesel availability against constrained tanker traffic through Hormuz and continuing regional attacks. Together, these developments are keeping supply disruption central to oil pricing.

instruments