Brent Closes at $114.14 as Supply and Shipping Disruption Fears Mount
Key Facts
Brent crude futures closed at $114.14 a barrel on October 23, compared with $113.17 the previous day, according to EL7 daily data. The close came after prices rose amid concerns about supply security and shipping in the Middle East. In a morning trading snapshot at 0639 GMT, Reuters reported Brent up 1.2% at $114.47 a barrel. U.S. West Texas Intermediate crude was up 1.4% at $100.84 at the same time. Reuters had said Brent closed in the previous session at its highest level since May 4 and was on track for a third straight weekly gain.
Reuters linked Friday's more than 1% rise in oil prices to Houthi attacks in Saudi Arabia, saying the developments raised concerns about further disruption to Middle East energy supplies. The agency reported that Aramco ordered employees at its Dhahran headquarters to evacuate and work remotely on Thursday. Reuters based its account on six people familiar with the matter, and the company did not immediately respond to a request for comment. The report did not specify the reason for Aramco's action. Separately, the Associated Press attributed to a Houthi military spokesman a claim that a facility belonging to Aramco in Yanbu had been targeted and caught fire, and also reported his claim that the Defense Ministry in Riyadh had been targeted, without providing evidence.
The Associated Press reported that Iranian television said seven oil tankers caught fire or were damaged by mines overnight from Wednesday to Thursday in the Strait of Hormuz. The report gave no details about the tankers' flags or possible casualties. The agency also cited the United Kingdom Maritime Trade Operations Centre as saying October had seen the highest number of reported attacks on commercial vessels since March. These events coincided with investor concerns about oil transport routes in the region. ING analysts said markets were increasingly worried about renewed escalation in the Gulf, a scenario that could threaten oil flows that have so far remained remarkably resilient.
The capacity of Saudi Arabia's East-West pipeline highlights an alternative route for exporting oil if navigation through the Strait of Hormuz is disrupted. Aramco President Amin Nasser said in an interview with Al Arabiya Business, cited by the Associated Press, that the pipeline's capacity had increased from two million barrels to seven million barrels per day. The agency noted that the pipeline was built in the early 1980s and played an important role in enabling Saudi Arabia to export oil after the strait was disrupted during the war with Iran. By contrast, the U.S. Energy Information Administration said the pipeline was shipping more than 5 million barrels per day through the port of Yanbu before attacks disrupted it in September. The agency added that the disruption pushed the daily Brent spot price to $131 a barrel on September 15.
Signs of supply pressure extended to Libya, where Reuters reported that output at the Hamada and Zella fields fell after a pipeline valve was shut, cutting the flow of oil from the fields to the port of Zawiya. The U.S. Energy Information Administration estimated the average Brent spot price at $114 a barrel in September, up $23 from August. It attributed the increase to attacks on oil facilities and tankers in the Middle East. The agency raised its forecast for average Brent in the fourth quarter of 2026 to $105 a barrel, up $14 from the previous month's forecast. The forecast assumes that restrictions on Middle East oil flows will continue.
The Energy Information Administration said oil prices could remain elevated until restrictions on Middle East flows end and inventories are replenished. It estimated that global inventories fell by an average of 1.9 million barrels per day in the third quarter of 2026 and would decline by a further average of 0.7 million barrels per day in the fourth quarter. On the response, the International Energy Agency said its members had approved the distribution of about 330 million barrels from stocks through October 15. It added that they had agreed to take the necessary steps to complete the release of about 100 million remaining barrels in a timely manner. These figures put inventory trends and Middle East supplies at the center of the factors markets are watching in the coming period.