Brent rises 1.8% as attacks on Saudi Arabia outweigh prospects of increased supply
Key Facts
Oil prices rose at settlement on Monday, 12 October 2026, as the impact of attacks on Saudi Arabia outweighed prospects of increased supply, according to Reuters. Brent crude gained $1.93 a barrel, or 1.8%, by the close of a session marked by volatility between morning trading and settlement. West Texas Intermediate crude also rose $1.89 a barrel, posting a 2% gain at settlement, the agency reported. According to EL7.AI platform data, Brent closed at $106.65 a barrel that day, while U.S. crude settled at $93.74 a barrel. The gains came as attacks continued in the region, with prospects of increased supply providing a counterweight to market moves, according to Reuters' account of the session.
Brent futures had come under pressure earlier in the day, with ING saying they fell more than 2% during morning trading. The bank described crude as having dropped "more than 2% at one point in trading this morning," despite the escalation in the Middle East. In the Strait of Hormuz, Tasnim news agency quoted Iran's Revolutionary Guards navy as saying an oil tanker caught fire after striking a naval mine. The navy described the tanker as the third involved in the incidents covered by its announcement on the waterway and attributed the fire to the mine strike. The Revolutionary Guards navy's account of the tanker incident coincided with the attacks on Saudi Arabia that Reuters cited as the reason upward pressure outweighed prospects of increased supply by the end of the session.
The shipping incidents in Hormuz follow a sharp decline in the volume of oil passing through the strait, according to a table published by the U.S. Energy Information Administration on flows through the waterway. Those flows stood at 4.9 million barrels per day in the second quarter of 2026, compared with 21.6 million barrels per day in the fourth quarter of 2025. Oil passing through the strait had totalled 14.9 million barrels per day in the first quarter of 2026, according to the same table. On the capacity to increase production, the International Energy Agency estimated global spare crude production capacity at more than 4 million barrels per day during the fourth quarter of 2025. The agency said this capacity was concentrated primarily in Saudi Arabia and that its estimate excluded countries under sanctions, in the period before flows fell to their second-quarter level.
On inventories, the International Energy Agency said in its September Oil Market Report that observed global oil inventories fell by 95 million barrels in August. That decline brought cumulative inventory drawdowns since February to 507 million barrels, according to the report, which covered developments in global supply and inventories. As part of the inventory response, the agency announced that about 325 million barrels had already been released under the collective action by member countries. The released volumes were announced in its executive director's statement on the meeting of member governments held on 7 October, before the oil trading session covered here. The agency added that fulfilling the remaining commitments under this action would bring about 100 million additional barrels to market, with those volumes still contingent on implementing the pledged releases.
In its price outlook, the U.S. Energy Information Administration projected that spot Brent would average $105 a barrel in the fourth quarter of 2026. That estimate represents an increase of $14 a barrel from the administration's forecast in the previous month's report, according to the Short-Term Energy Outlook. On the Russia-Ukraine front, U.S. President Donald Trump announced a ceasefire agreement covering the two countries' energy sectors. But French President Emmanuel Macron said Russia had continued bombing energy infrastructure in the hours before his remarks, according to Reuters. Macron said: "The facts show that the Russians have continued bombing energy infrastructure in recent hours," addressing the continued attacks despite the announcement of the truce.
In response to tightness in the diesel market, International Energy Agency Executive Director Fatih Birol called for accelerating the release of the remaining pledged inventories. Birol stressed prioritising diesel in implementing the action, saying what was needed was to "accelerate the remaining releases to fulfil this earlier commitment, prioritising diesel." The agency is scheduled to issue its next monthly Oil Market Report on 14 October 2026, according to its announced release schedule. The report will be followed by the agency's Governing Board meeting scheduled for 15 October, according to its statement on the response to conditions in the global diesel market. The meeting will review efforts to address tightness in that market, following Birol's call to accelerate implementation of existing commitments and release the remaining volumes.