Houthi strikes on Riyadh and tanker attacks push oil to two-week highs

A weekend of violence in the Middle East — a Houthi missile strike on Riyadh's international airport and drone attacks on two oil tankers near the Strait of Hormuz — drove crude prices to their highest levels in nearly two weeks on Monday, overwhelming what had briefly looked like good news for fuel markets: fresh Russian diesel supplies and a ceasefire on energy infrastructure attacks in Ukraine.

Brent crude rose as much as $2.09, or 2%, to $106.80 a barrel, its highest since September 29, according to Oilprice.com data. By mid-morning London time, Reuters reported Brent at $106.19, up $1.24 or 1.2%. West Texas Intermediate climbed to between $92.96 and $93.78 a barrel, up roughly 1.2–2.1% depending on the hour.

The Iran-aligned Houthis claimed responsibility for Saturday's strike on Riyadh's international airport, which killed 13 people and wounded more than 300. Further attacks were reported on Sunday. Separately, the United Kingdom Maritime Trade Operations reported that a tanker was struck by a drone near Oman's Sohar and a second vessel was damaged while transiting the Strait of Hormuz.

The sense of some kind of normality of exports from the Strait of Hormuz was shattered last week. Fresh attacks by the Houthis on Saudi Arabia added to this and helped to lift prices.— Bjarne Schieldrop, commodities analyst, SEB

Hard choices over what to defend will increasingly have to be made: oil infrastructure, military installations, royal palaces, civilian airports or other.— Bjarne Schieldrop, commodities analyst, SEB

The tanker attacks threaten to interrupt a fragile recovery in Gulf oil exports, which had climbed back to 81% of prewar levels in September. Crude and condensate shipments had recovered further, to 91% of prewar levels, but refined-product exports remained at just 60%, according to Oilprice.com.

Goldman Sachs lifted its December Brent price target to $90 a barrel, up from $85, putting the contribution of geopolitical risk at just over $20 a barrel. The bank also forecast WTI to average $81 in December 2026 and $73 in 2027, noting that WTI is unusually cheap relative to Brent because of high U.S.-to-Europe shipping costs.

The price surge came despite two developments that might ordinarily have pushed oil lower. In an announcement Friday, President Donald Trump said Russia would move immediately to send more than 300,000 metric tons — roughly 2.25 million barrels — of diesel to U.S. and global markets, with more to follow. Moscow has also partially lifted its ban on diesel exports, releasing an additional 500,000 metric tons, or about 3.7 million barrels, onto international markets. ICE gasoil futures fell 2.3% on the news.

The immediate impact of the deal is questionable, as Russia's refining capacity has been severely reduced. However, Moscow has partially lifted its ban on diesel exports, allowing 500,000 tons (around 3.7 million barrels) to be released onto the international market — equivalent to roughly one day of US consumption and around 13% of global demand.— Tamas Varga, analyst, PVM

On Sunday, Trump announced that Russia and Ukraine had reached an agreement to halt strikes on each other's energy infrastructure. The truce showed signs of collapse almost at once: according to Reuters, Ukrainian President Volodymyr Zelensky said Monday that Russia had broken the agreement, while Moscow offered no response.

IEA head Fatih Birol called on all member countries to evaluate whether further diesel releases were needed, adding that those that had not yet fully delivered on pledged volumes should speed up their releases and give priority to diesel.

Demand forecasts add another layer of uncertainty. On Monday, OPEC Secretary General Haitham Al Ghais said the group has revised its outlook for global oil demand growth in 2026 down to just 400,000 barrels per day, a sharp drop from the 1.4 million bpd it had projected at the beginning of the year, though modestly above the 380,000 bpd figure OPEC put forward in September. The IEA's outlook is more severe, pointing to a 2.5-million-bpd drop in worldwide consumption in 2026 before a 2.6-million-bpd recovery in 2027.

In the Gulf of Mexico, Shell, Chevron and BP were working to redeploy personnel and restore offshore production after Hurricane Isaias made landfall early Saturday and disrupted platform operations.

With Houthi attacks showing no sign of abating, the Strait of Hormuz — through which a significant share of global crude flows — remains the market's central anxiety. How much of the roughly $20-a-barrel risk premium holds will depend largely on whether the weekend's violence marks an escalation or a one-off spike.

Why it matters — The Strait of Hormuz handles a significant share of global seaborne oil, and sustained attacks there — layered on top of a demand slump and a shaky Russia-Ukraine ceasefire — mean consumers and businesses worldwide face the prospect of persistently elevated fuel costs.

Sources differ on Brent crude price on Monday morning: $106.80/barrel (up $2.09, or 2%) (oilprice.com) vs $106.19/barrel (up $1.24, or 1.2%) at 1124 GMT (live.euronext.com)

Sources differ on WTI crude price on Monday morning: $93.78/barrel (up $1.93, or 2.1%) (oilprice.com) vs $92.96/barrel (up $1.11, or 1.2%) at 1124 GMT (live.euronext.com)

Reported by oilprice.com, reuters.com, live.euronext.com, energyconnects.com