U.S. crude inventories fall 3.06 million barrels as Saudi tensions rise
Key Facts
U.S. crude oil inventories fell by 3.06 million barrels to 412.5 million barrels, according to Energy Information Administration data cited by Investing.com in a report published on October 21, amid rising security tensions in Saudi Arabia. The draw exceeded the 820000-barrel decline analysts had expected, according to the website. In fuels, the agency's weekly report showed gasoline inventories in the week ended October 16 were 5% below the five-year average for this time of year. Distillate inventories were 9% below their average for the same period. Distillate stocks rose by 1.7 million barrels during the week but remained below that average. Globally, the International Energy Agency said observed oil inventories at the end of September were 509 million barrels below pre-war levels.
In Saudi Arabia, two people were killed and two injured on Wednesday by falling debris from a drone intercepted by air defences, according to The National. The incident occurred near a processing facility at the Shaybah oil field. Saudi Arabia's energy ministry said the incident did not affect the field's operations, the newspaper reported. The ministry confirmed that "there was no impact on operations at the oil field." As Houthi attacks escalated, the U.S. State Department ordered non-essential government personnel and their family members to leave Saudi Arabia, according to the newspaper.
The security escalation coincided with a recovery in Middle Eastern oil flows, which Kpler provisionally estimated averaged more than 24.5 million barrels per day in the week ended October 18, according to The National. The estimate excludes Iranian exports. It includes oil transiting the Strait of Hormuz and net exports from ship-to-ship transfers in the Gulf of Oman. It also counts cargoes loaded at ports in Fujairah and Oman and exports via the Red Sea. More broadly, the International Energy Agency said in its October report that global oil supply rose to 102.3 million barrels per day in September, led by Gulf producers.
In the shipping market, estimated very large crude carrier rates on the Gulf-to-East Asia route reached a record of nearly $1.4 million per day on October 7, according to a Bloomberg report published the following day and carried by gCaptain. Bloomberg cited Signal Ocean as saying the number of empty very large crude carriers heading to Atlantic ports had halved from the previous month. The U.S. Energy Information Administration linked the rising cost of delivering crude to refineries to insurance costs and tanker rates. The agency said "vessels are also taking longer routes to avoid conflict zones," reducing the number of ships available for loading. Cost pressures extended to refining, with the International Energy Agency saying record shipping and crude costs had weakened refinery margins in Europe and Asia. Discounted feedstocks, meanwhile, supported U.S. refinery margins, according to the agency.
On the outlook, the U.S. Energy Information Administration raised its forecast for the average Brent spot price in the final quarter of 2026 to $105 per barrel, up $14 from the previous month's forecast. The agency expects constraints on Middle Eastern oil flows to persist during the same quarter, with disrupted production averaging 4.5 million barrels per day. On consumption, the International Energy Agency expects global oil demand to decline by an average of 2.6 million barrels per day in 2026. The agency attributed this to pressure on consumption from high prices and a deteriorating economic outlook. The regular release time for the U.S. weekly inventory report remains Wednesday at 10:30 a.m. U.S. Eastern Time, according to the Energy Information Administration's schedule.