Brent futures hit $111.05 a barrel as Middle East shipping risks mount
Key Facts
Brent crude futures reached $111.05 a barrel during trading on Tuesday, 20 October 2026, their highest since May, according to Reuters. The rise came amid Middle East tensions and risks to shipping and oil supply transportation. The futures had settled at $109.55 a barrel on Monday, down 31 cents, or 0.3%, according to the agency. Tuesday's move marked a return to gains for Brent after its decline in the previous session, as the oil trade faces record transportation costs.
In the latest security developments, the Houthis announced attacks they said targeted sites in Saudi Arabia, according to Reuters. The sites named by the Houthis included an Aramco facility in Yanbu and the Shaybah oilfield. They also listed King Khalid Airport and Abha Airport among their declared targets. Reuters said "Saudi authorities did not immediately confirm the Houthi claims" and that it could not independently verify them. On shipping, the agency cited Kpler as saying in a Monday note that at least 18 vessels had reportedly been attacked over two weeks.
ING linked pressure on oil logistics to developments in the Middle East, pointing to declining tanker utilization efficiency. The bank described transportation costs as having reached "record tanker freight rates". In response to shipping challenges, the U.S. Energy Information Administration said Saudi Arabia had increased its use of ship-to-ship oil transfers off Oman's coast. According to the bank, the United States is considering allowing the sale of sanctioned tankers to expand capacity in the mainstream shipping market. The measure, which remains under consideration, aims to lower transportation costs by making more tankers available.
Alongside transportation pressures, U.S. Energy Secretary Chris Wright pointed to a recovery in Gulf crude flows to about 80% of pre-war levels, according to Investing.com. He said refined product shipments remained constrained despite this recovery. In the United States, the Energy Information Administration reported that East Coast distillate inventories fell in September to 32% below their five-year seasonal average. In China, ING estimated apparent oil demand in September at 12.75 million barrels per day. That represents a monthly decline of 2.7%. The year-on-year decline was 15.2%, as logistical pressures on the oil trade persisted.
Tuesday's price gains extended to U.S. crude, which was last quoted at $104.80 a barrel in the Reuters update. The crude rose $1.14 a barrel, a gain of 1.1%, according to the same update. In its coverage of the previous session, Reuters had noted relatively subdued trading in the front-month U.S. crude contract ahead of its expiry. The contract expires on 20 October, coinciding with the session in which prices rose.
In its forecasts prepared on 1 October, the U.S. Energy Information Administration estimated that Brent spot prices would average $105 a barrel in the fourth quarter of 2026. The agency raised that estimate by $14 a barrel from its forecast in the previous month's report. On the regional front, Egypt's House of Representatives adjourned its sessions at the close of Monday's meeting until 26 October, when it will resume discussing authorization to provide military support to Saudi Arabia, according to Asharq Al-Awsat. House Speaker Hisham Badawi decided to adjourn the sessions until that date. The Energy Information Administration is scheduled to publish the next edition of its Short-Term Energy Outlook on 10 November 2026.