Brent Holds Near Five-Month High After Houthis Claim Strikes on Saudi Oil Sites

Oil is sitting near a five-month high, and the reason is a widening war on Saudi Arabia's doorstep.

Brent crude futures were at $110.10 a barrel early Tuesday, Oct. 20, Saudi time. The previous session peaked at $110.70, the highest since May 20. The November West Texas Intermediate contract, which expired Tuesday, was near $103.91. The more-active December WTI contract was at $98.93.

What the Houthis say they hit

On Monday, Oct. 19, Yemen's Iran-aligned Houthis said they launched several attacks on Saudi energy, airport and military targets. They named an Aramco site in Yanbu, the Shaybah oilfield, Riyadh's King Khalid International Airport and Abha airport.

Saudi authorities did not immediately confirm those claims, and Reuters could not independently verify them. The Houthis' earlier attack on the Riyadh airport on Saturday was deadly, and since then they have also struck Aramco and the presidential palace of the Saudi-backed government in Yemen. The Washington Post, which reported that sequence, described a war with no clear exit.

The violence inside Yemen is also escalating. A Houthi attack on a training camp for government security forces in Shabwa province on Monday killed 58 people and injured more than 200.

The Saudi-backed side is pushing back. Yemen's Armed Forces said they recaptured the port of Mocha, which the Houthis seized last month. The Saudi-backed Yemeni forces posted video of strikes on Houthi positions under what they call Operation "Dawn of Yemen."

Why Shaybah matters to the market

Market analysts are focused on the risk that attacks reach production itself. The Shaybah strike claim raises the possibility that Saudi Arabia would have to shut in some output, according to OilPrice.com's market analysis. Nothing in the record shows that has happened.

The Brent-WTI gap also shifted as the expiring November WTI contract rolled off. OilPrice.com put Brent about $5 a barrel above the U.S. benchmark, at $108.

The Saudi state oil company also faces friction with customers. Aramco's talks with Asian refiners over 2027 term contracts have stalled, according to OilPrice.com.

Shipping is under fire too

The Houthi front is not the only source of supply risk. Shiptracker Kpler said at least 18 vessels were reportedly attacked over two weeks, which it said keeps the risk premium intact.

The first Houthi attack on LNG shipping has now been reported. The UK Maritime Trade Operations center, UKMTO, reported strikes on a laden vessel trying to transit the Strait of Bab el-Mandeb. The Qatari-owned al Kharsaah appears to have been the only LNG carrier near Yemen's coast over the weekend, on a rare Red Sea run delivering Qatari LNG to Poland.

Asian LNG prices responded. The JKM benchmark moved above $30 per MMBtu, the highest since December 2022. QatarEnergy withdrew its offer to sell up to 10 older steam-turbine LNG carriers so it can step up Hormuz transits, wary of sending newer ships through the dangerous route.

Europe's storage picture adds to the pressure. Inventory builds have effectively stopped, with EU-wide stocks capped below 75% of capacity.

The counterargument on the premium

Not everyone treats this as a lasting supply loss. ING analysts said the market is pricing in a significant risk premium given the volatility. "If flows continue uninhibited despite the geopolitical environment, the risk premium would likely erode slowly," ING said in a note Tuesday, adding that "there are no signs of this yet."

The price reflects fear of disruption more than a measured drop in barrels. That fear has plenty of fuel.

The U.S. is also enforcing a blockade of Iranian ports. U.S. Central Command said Monday that its forces have redirected 130 ships since the blockade began and destroyed 13 vessels it says were violating it or were part of the Islamic Revolutionary Guard Corps' shadow network. "We will swiftly act against any vessels trying to run the blockade," Adm. Brad Cooper, the CENTCOM commander, said.

President Donald Trump told Fox News on Monday that he personally believes Iran was behind the Sept. 30 attempted attack on a Tel Aviv-bound flydubai flight. Passengers and crew subdued the co-pilot, and the plane landed safely in Saudi Arabia.

The pump price problem

Crude is only part of what Americans pay. Dow Jones reported that recent gasoline price spikes stem partly from refinery bottlenecks, a problem that could strain household budgets and weigh on growth even as the Trump administration works to lower energy prices. Some midterm battleground states are being hit particularly hard by high gas prices.

Energy companies are collecting the upside. Halliburton posted a third-quarter profit of $417 million, or 50 cents a share, versus $18 million, or 2 cents a share, a year earlier.

On the Russian side, Ukrainian drones hit an oil terminal in Putin's hometown after Trump's effort to enforce a fragile energy ceasefire collapsed, adding another strand of supply risk.

What to watch

It remains unclear whether Saudi authorities confirm damage at Shaybah or Yanbu and whether output is curtailed. If barrels keep flowing, ING expects the premium to fade slowly. If Aramco has to shut in production, the Houthi claims become a physical supply shock.