Morning Highlights: Riyadh Airport Strike Kills 13 and Wounds Over 300 - Russian Diesel Pledge Cuts Gasoil 2.3%

Monday, October 12, 2026 | 6:45 AM ET

Brent (December) $105.68 | WTI (November) $92.74

Brent +$0.96 (+0.9%), WTI +$0.89 (+1.0%). ICE gasoil is down 2.29% from Friday's $1,483.00 settle, to about $1,425 a metric ton, after Trump said Russia will immediately supply more than 300,000 tons of diesel to US and global markets. The Houthis claimed Saturday's strike on Riyadh's international airport, with further attacks Sunday. UKMTO reported a tanker hit by a drone near Oman's Sohar and another damaged transiting Hormuz.

Bottom Line

The Riyadh strike sets the tone for the week. The Houthis claimed responsibility for the Saturday attack, which killed 13 people and wounded more than 300, and renewed their warning over Saudi airports. That is well above Thursday's three deaths at the Riyadh and Abha airports. The reporting here describes no damage to oil facilities, and Saudi Arabia has not announced a response. The Yemeni government's offensive toward the Bab el-Mandeb coast continues.

Goldman Sachs' latest note, led by Daan Struyven, frames the escalation question. The bank raised its December Brent forecast to $90 from $85 and left its 2027 average at $80. It estimates the risk premium in the timespreads at just over $20 a barrel, and says dated Brent is above $130, so physical buyers are paying well above futures. Goldman estimates Persian Gulf exports, including about 4 million bpd of estimated dark exports, were 22.9 million bpd on October 9, broadly in line with the 2025 average. It puts the global market at a 0.3 million bpd deficit in September, against 7.2 million in March. Gulf liquids output is still about 6 million bpd below February, an improvement from 14.8 million below in April. Prices stay high, in its view, because of downside supply risks, low stocks outside OECD commercial storage that now add $6 to its spot fair value of $80, and demand for physical restocking and hedging.

On the Iran question, Goldman sets out both sides. Some market participants believe the export recovery is unacceptable to Iran and that Iran or the Houthis may shift to oil infrastructure such as ports, terminals, pipelines and oilfields, possibly after the US midterms. Others see reasons Iran may hold back: US product prices are already high, the regime has a history of patience, parallel trade through Caspian ports offers some relief, and Tehran may want to avoid US strikes on its own energy infrastructure. The bank's scenarios show the spread of outcomes. Brent could average about $125 in 2027 if Gulf output stays 5 million bpd below February levels, or fall into the $60s if it ends 1 million bpd above. It reiterated long summer 2027 European gasoline as a hedge.

Gasoil is reacting to Russia. Trump said Friday that Russia will supply more than 300,000 tons of diesel, about 2.25 million barrels, with more to come. For scale, Vitol's Russell Hardy said last month that roughly 2 million bpd of products are missing from Russia, so the first volume covers about a day of that gap. The market is pricing the signal more than the barrels, and the setting around it is unclear. Trump also announced Sunday that Ukraine and Russia agreed to an energy ceasefire. Zelenskiy said he learned of it from the media and is waiting for details. He accused Russia of violating it with a strike on a thermal power plant in Kharkiv, and said Ukraine carried out no refinery attacks overnight. Russia has not commented, and Macron said he had seen no sign of Russia respecting it. A person familiar with the situation said the US threatened to cut intelligence sharing and weapons deliveries to pressure Kyiv. That account is unconfirmed. Russia's ban on most diesel exports runs through October 31, and gasoil would likely reverse if the ceasefire fails or the volumes slip.

Freight is a limiting factor. A VLCC from the US Gulf Coast to China costs $634,974 a day, per the Baltic Exchange, just under the record of more than $637,000 on October 8, and Gulf-to-Asia rates touched $1.4 million a day earlier this month. Sparta Commodities' June Goh blamed inefficient ship-to-ship transfers around Hormuz and more Atlantic Basin crude going east, which leaves less open tonnage. Goldman ties the same costs to WTI, forecasting $81 for December and $73 for 2027 because freight keeps WTI unusually low against Brent. Attack frequency is the other constraint: Reuters sources reported the most tanker attacks in any week since the war began in the week to October 7, and today's two incidents add to that.

Other items. OPEC cut its 2026 demand growth forecast to 400,000 bpd from 1.4 million, and Haitham Al Ghais said it expects the deferred demand in 2027. IEA chief Fatih Birol said all members should assess whether more diesel releases are needed and that countries that have not fully delivered pledged volumes should accelerate them, prioritizing diesel. Hurricane Isaias made landfall early Saturday, and Shell, Chevron and BP are redeploying staff and restoring production. The last shut-in figure was 62.9% of Gulf of Mexico oil output as of Thursday morning, per the Marine Minerals Administration, and no update or restart timing has come out.