Morning Highlights: Brent Hits Its Highest Since May as the US Pulls Diplomats From Saudi Arabia and Reports Detail Post-Midterm Strike Plans

Thursday, October 22, 2026 | 6:45 AM ET

Brent (December) $111.91 | WTI (December) $99.30

Brent +$3.09  hitting its highest since May 18. WTI +$2.15. The Houthis struck several targets in Saudi Arabia on Wednesday, killing at least one person at a civilian airport in Dammam and two in a drone attack on a Saudi oil field. The State Department ordered some diplomats and family members out of its Saudi missions and plans to withdraw families from other Middle East posts. Morgan Stanley analysts estimate Middle East crude exports were about 17 million bpd last week.

Bottom Line

The escalation is on three fronts at once. In Saudi Arabia, the Houthi attacks left at least one dead and eight wounded at Dammam’s civilian airport, and two dead in a drone attack on an oil field that the reporting doesn’t name. The US response, ordering some diplomats and families to leave Saudi missions, is a security signal that goes beyond what the market saw last week. Iranian media reported explosions in Sirik in southern Iran, cause unknown. The IRGC Navy said four vessels involved in illegal oil transfers in the northern Gulf were hit simultaneously and caught fire, that three more struck mines west of Hormuz, and warned the US of a wider response against its regional bases. Those are IRGC statements and none has been independently verified.

The New York Times reported, citing US officials and others briefed on the planning, that the US and Israeli militaries have developed plans for a short, intensive round of strikes on Iran after the November 3 midterms. The paper says targets would likely include nuclear sites, including the buried Pickaxe Mountain facility, and Iran’s missile and drone arsenal. It also says energy infrastructure would likely be hit, though some officials say targeting would avoid refineries and oil sites because Trump wants to prevent higher gasoline prices. US forces, including three aircraft carriers and thousands of Marines, would not be fully in place until early November, and Defense Secretary Pete Hegseth met Netanyahu this week. The sources are anonymous and the White House said it does not comment on plans “that may or may not exist.” The paper notes Trump has repeatedly vetoed plans for a return to major combat, including a last-minute postponement earlier this month. Tehran analyst Peiman Salehi said Iran’s retaliation for an attack on Pickaxe would include Saudi refineries, Aramco’s among them. Mahdi Mohammadi, an adviser to negotiator Mohammad Bagher Ghalibaf, called the idea of a 72-hour campaign a “fantasy.” Israel’s October 27 election could complicate the timing.

That risk fits a market where flows look strong and prices still climb. Kpler data cited in Reuters’ Ron Bousso column put Middle East crude exports at an average of 17.3 million bpd so far in October, up from 16.4 million in September and above the 16.9 million averaged in the two months before the war. Hormuz flows are 11.7 million bpd, about 82% of pre-war levels, helped by convoys along the Omani coast under US naval protection. Roughly a third of crossings still use the Iran-controlled northern route, probably in coordination with Tehran. UKMTO reported a record 12 attacks in or around Hormuz last week, and the Wall Street Journal counts about 30 this month. Bousso reads the gap between ample barrels and rising prices as traders worrying less about supply today than about whether it can be sustained if fighting intensifies. Record Brent options volume on Tuesday, above 1 million lots per HiLo Analytics, supports that.

Moving the oil is what has become expensive. JPMorgan’s Natasha Kaneva said, “In April, the problem was a shortage of crude. In October, it is the cost of moving it.” A supertanker from the Gulf to China is near $1.4 million a day, more than 12 times pre-war, and Windward’s Michelle Wiese Bockmann said war-risk insurance has climbed to as much as 10% of a vessel’s value from under 3%. Aramco and ADNOC have started selling some cargoes on a delivered basis to buyers in China and India. Kpler’s Homayoun Falakshahi said traders can earn about $20 a barrel more reselling Iraqi crude, around $40 million on a supertanker cargo, which is why volumes hold despite the attacks. Capital Economics’ Hamad Hussain said Iran’s ability to deter transits has faded and that the shipping system is now well established.

Two supply items. A valve on the pipeline from Libya’s Hamada and Tahara fields to Zawiya port has been shut, cutting output at both, the head of the National Oil Corporation told Reuters, without giving a figure. Separately, the Kremlin said Putin hosted Trump’s envoy Steve Witkoff in St Petersburg and agreed to resume US-mediated peace talks with Ukraine as soon as next month. Zelenskiy said he supports the talks. That would bear on the refinery strikes, but nothing has been agreed.