Brent falls 1.6% to $109.95, US crude drops 2.2% to $101
Key Facts
Brent crude fell 1.6% to $109.95 a barrel, while US crude dropped 2.2% to $101, in an Associated Press update on Monday, October 26. The decline followed a session in which the two benchmarks posted varying losses, with US crude down more than 2% while Brent’s decline remained below that level. EL7 closing data recorded Brent at $115.10 on October 26, compared with $116.72 on October 23. It also showed US crude closing at $101.28, down from $103.27 in the previous session. These figures show that recorded closing levels differ from prices cited in intraday trading updates.
The decline followed a 3.1% rise in Brent on Friday, October 23, to $116.72 a barrel, its highest close since June 2022, according to the Associated Press. For the week ended October 23, Brent gained 6% and US crude rose 2.3%, according to a Reuters update. Houthi attacks in Saudi Arabia had raised supply concerns, Reuters reported, keeping prices sensitive to regional security developments. On Monday morning, Reuters said concerns about renewed military action had eased following mediation efforts to de-escalate tensions. But it said the calm could be temporary, with Houthi attacks continuing and Riyadh intercepting more missiles and drones.
The International Energy Agency’s October report forecast that global oil demand would fall by 2.5 million barrels a day year on year in the fourth quarter of 2026, with the decline averaging 2.6 million barrels a day for the year. The forecasts followed year-on-year demand contractions of 5 million barrels a day in the second quarter and 3.7 million in the third quarter. The agency attributed the lower forecasts to product availability constraints, higher fuel prices and a deteriorating economic outlook. It said diesel would account for 25% of the projected decline in demand. The figures place the expected drop in consumption alongside supply disruptions and fuel availability, two factors affecting the energy market during the year.
On the supply side, global production rose by 2.5 million barrels a day month on month to 102.3 million barrels a day in September, with Gulf countries the main driver of the increase, according to the International Energy Agency. However, the agency said renewed Gulf attacks were making the supply recovery fragile. It expects oil supply to fall by an average of 5.8 million barrels a day to 100.7 million barrels a day in 2026. Reuters also reported that the effects of the war on Iran continued to disrupt commercial shipping through the Strait of Hormuz and the Bab el-Mandeb Strait. Agency data showed observed global oil inventories fell by 10 million barrels in September and were 509 million barrels below their level at the end of February.
The International Energy Agency expects global refinery throughput to reach a seasonal low of 81.3 million barrels a day in October before rising to 84.6 million by year-end. In the United States, the Energy Department said on October 23 that it would allow an emergency exchange of up to 400,000 barrels from the Strategic Petroleum Reserve to address a disruption in crude supplies to the Lake Charles refinery in Louisiana. The department said the borrowed oil would be returned with additional barrels, and that the exchange would support refinery operations and the stability of regional fuel supplies. In a broader context, International Energy Agency Executive Director Fatih Birol said on October 2 that the effects of the Strait of Hormuz crisis remained acute, particularly in the diesel market, and that flows of refined products were still constrained. He added that about 325 million barrels had been released by that date as part of the agency’s collective action, more than 80% of the pledged 400 million barrels.
On the diplomatic front, Iran’s Foreign Ministry said high-level delegations from Saudi Arabia, Pakistan and Turkey were in Tehran on Monday to meet Iranian officials, seeking to prevent renewed fighting between Iran, Israel and the United States. On demand, the International Energy Agency expects a partial recovery of 2 million barrels a day in 2027, while global oil use remains 0.6% below its 2025 level. The agency thus projects a recovery in demand next year, but not a return to 2025 levels. Supply disruptions and limited refined-product availability remain among the factors shaping the backdrop for the oil market, according to the agency’s estimates. The sources provided no later date for mediation efforts or an update to the demand forecasts.