Brent Closes at $117.26 as Supply Disruption Fears Mount
Key Facts
Brent crude closed at $117.26 a barrel on October 23, up from $113.17 in the previous session, while West Texas Intermediate ended the day at $103.13, compared with $99.47. Both benchmarks gained as concerns about supply disruptions grew after fighting between Saudi Arabia and the Houthis escalated, according to a Reuters report. Saudi Aramco ordered its Dhahran headquarters evacuated on Thursday, Reuters reported, as fighting intensified. Authorities in the United Arab Emirates also detected an oil spill from a tanker off Umm Al Quwain, without identifying the cause of the spill or the vessel. Closing prices reflected a stronger move than the figures Reuters reported during the session, when contracts had earlier risen to lower levels.
By 13:00 GMT, Brent was up 1.5% at $114.99 a barrel after reaching $115.16, its highest level since May 4. West Texas Intermediate was up 1.8% at $101.27 at that time. The Associated Press reported that Brent rose 3.6% to $117.20 on October 23, after trading below $97 at the start of the month, reaching its highest level since March. These readings differ from EL7's daily close of $117.26 for Brent and $103.13 for U.S. crude because they capture prices at different times during the session. On a weekly basis, Brent was on track for a 4.4% gain, its third in a row, while West Texas Intermediate was poised for a 0.4% loss.
An analyst at UBS attributed market concern to the possibility of an escalation that could, in the worst case, lead to fresh supply disruptions. He said volatile oil flows and higher shipping costs had left the market undersupplied. Attacks on energy facilities and routes are adding to concerns about crude transport as traders monitor developments in the region. On October 20, Brent rose to $111.05 a barrel, its highest level since May, while West Texas Intermediate reached $104.94, its highest since September. Reuters linked those gains at the time to a geopolitical risk premium following Houthi attacks and reports of vessels being targeted in the Gulf.
U.S. Energy Information Administration data show that global oil inventories fell by an average of 1.9 million barrels a day in the third quarter of 2026, with a further decline of 0.7 million barrels a day expected in the fourth quarter. In its October report, the agency raised its forecast for the average spot price of Brent in the fourth quarter to $105 a barrel, up $14 from the previous month's estimate. It said attacks on Saudi Arabia's East-West Pipeline underscore the risk that oil flows and prices will remain volatile. These are quarterly estimates from the agency, while closing prices reflect market activity on the trading day. The inventory decline alone does not establish that it caused the gains in the October 23 session.
The EIA forecast that the average spot price of Brent would fall to $87 a barrel in the second quarter of 2027, then to $74 in the fourth quarter of the same year, as constraints on oil flows ease and inventories are rebuilt. An analyst at XS.com said continued attacks and delivery delays would give elevated prices a stronger footing, and that the scale of the actual disruption and the time needed to restore operations would determine the supply risk premium. He said: "If attacks continue and delay deliveries, elevated prices will have a stronger footing." The EIA is scheduled to release its next weekly petroleum status report on October 28, 2026, providing an opportunity to track U.S. inventory data.