Brent Falls as US-Iran Talks Eyed

Brent crude traded near $106 per barrel on Thursday, holding recent gains as escalating hostilities in the Middle East and Eastern Europe heightened concerns over supply disruptions. A container ship sank in the Strait of Hormuz on Wednesday after being hit by unidentified projectiles, while Iran-backed Houthi forces continued missile and drone attacks across Saudi Arabia. More oil tankers are steering clear of their usual crude-loading areas, indicating that increased Iranian attacks on shipping are disrupting export operations. Meanwhile, Russia accused Ukraine of striking two oil refineries on Wednesday, including the 400,000-barrel-per-day Ryazan facility, violating an “energy ceasefire” announced by US President Donald Trump. In the US, API data revealed that crude inventories fell by 11.1 million barrels last week, marking the largest decline since June 2025.

Brent crude rose to around $106 a barrel on Wednesday amid renewed attacks across the Middle East and the IEA’s latest assessment of the oil market. The agency’s October Oil Market Report warned that constraints in diesel markets could persist well into 2027, with fresh attacks on Saudi Arabia threatening to derail a recovery in global oil supply. Fighting between Saudi Arabia and the Iran-backed Houthis continued to escalate, with Saudi Arabia’s Ministry of Energy reporting an overnight attack on an administrative building belonging to oil giant Saudi Aramco. The incident followed a series of Houthi attacks on Riyadh over the past week. A Saudi-led coalition reportedly struck Houthi energy terminals and fuel reserves in Yemen. Meanwhile, tensions between the US and Iran remained elevated. US Central Command rejected claims by the commander of Iran’s IRGC Navy that the Strait of Hormuz was under Iranian control and that any approaching US Navy warships would be “sunk.”.

Brent crude fluctuated around $106 a barrel on Wednesday, as investors weighed improving export flows against renewed attacks across the Middle East. The US said it helped facilitate the shipment of more than 19 million barrels of crude through the Strait of Hormuz, offering some reassurance that supplies were continuing to move despite the conflict. Saudi Arabia increased production, with September output rising by roughly one-third from its previous level. Meanwhile, security concerns have intensified following missile and drone attacks by Iran-backed Houthi forces on several Saudi locations, including the Saudi Aramco office complex in the east of the kingdom. The latest strikes have increased pressure on Washington to support its regional ally and heightened uncertainty over the recovery in Gulf energy shipments. Iranian attacks on tankers passing through the Strait of Hormuz are adding further risks to supply stability.