Oil Price Update: What Is Moving Crude Markets
October 20, 2026 | ATN Trade & Finance
Brent crude is trading near $110 a barrel in Tuesday's session — after settling at $109.55 on Monday — as fresh Houthi strike claims on Saudi infrastructure pushed prices back toward last week's highs. WTI was near $103–104, continuing to trade at an unusual discount to Brent that reflects the divergence between accessible Atlantic Basin supply and constrained Gulf crude.
The Core Driver: A Strait That Is Still Not Open
The 2026 Strait of Hormuz crisis — which began when the US and Israel struck Iranian targets February 28 and Iran announced a strait closure March 2 — is now in its eighth month with no resolution. A June memorandum briefly reopened passage; it collapsed in early July after Iran struck vessels that deviated from its approved route. The US reinstated a blockade of Iranian ports July 14. As of mid-October, Iran has offered a phased reopening tied to US concessions; Washington has rejected the terms.
The supply impact is asymmetric. Gulf crude exports recovered to above 75% of pre-war levels in September, primarily through overland pipeline routes and ship-to-ship transfer arrangements. Refined products and LPG have not followed: Middle East product shipments ran at approximately 1.9 million barrels a day in September, versus 4.7 million before the war. Qatar's LNG exports fell roughly 96% over the conflict's first six months. Global observed oil inventories are 509 million barrels below pre-war levels, near the lowest onshore stocks since at least 2016.
This week added two fresh disruptions. The Houthis claimed strikes on an Aramco facility in Yanbu, the Shaybah oilfield, and a Riyadh airport — claims Saudi authorities have not confirmed and Reuters could not independently verify. A tanker also exploded after hitting a naval mine on Sunday, according to Iran's Revolutionary Guards. Kpler data show crude flows through the strait fell to approximately 8.5 million barrels a day last week, from more than 20 million two weeks earlier.
The Russia Waiver: A One-Day Relief Valve
A US waiver on certain Russian energy sanctions, announced Monday, briefly pushed Brent down more than $3 intraday as markets priced in additional supply. Buyers returned within hours. SEB analyst Bjarne Schieldrop said the waiver "does little to fix the Hormuz supply problem" and warned that Iran could escalate further ahead of the November 3 US midterm elections. Analysts at Phillip Nova made the same assessment.
IEA: Deficit Through Year-End, Fragile Recovery
The IEA's October 2026 Oil Market Report cut its 2026 global demand forecast to approximately 102.4 million barrels a day — a decline of 2.6 million bpd from 2025 — with diesel accounting for roughly a quarter of the drop. Supply in September recovered to 102.3 million bpd but the full-year 2026 supply forecast stands at just 100.7 million bpd, leaving the market in deficit. The IEA expects the deficit to persist through year-end 2026, with a possible surplus emerging in 2027 if hostilities ease. IEA member countries have released approximately 331 million of 426 million barrels of emergency reserves committed to date. The recovery scenario in the IEA's base case explicitly assumes Middle Eastern hostilities do not escalate further — a condition that looked less certain Tuesday morning.
What this means: For importers and exporters, oil at $103–110 is a structural input cost, not a temporary spike. Diesel and LPG prices — where Middle East supply recovery has stalled — remain the acute pressure points in freight, manufacturing, and agriculture. The next catalyst in either direction is whether Houthi strike claims on Aramco translate into confirmed output losses: a verified Shaybah disruption would likely push Brent through $113 and toward the $120 level some analysts have flagged as the next resistance zone.
Sources:
- Brent Crude Oil Price Today: Back Near $110 as Houthis Claim Saudi Oil Strikes — Finance Feeds
- Oil Parked Above $110 a Barrel as IEA Warns Energy Markets Won't Return to Normal — CNN
- Strait of Hormuz Crisis 2026: Who Pays the Real Cost — Foresight Drafts
- IEA Cuts Oil Demand Again as 2026 Use Falls 2.6M bpd — Oil Monster
- Hormuz Ship Attacks Surge: Are Increased Oil Exports Sustainable? — Al Jazeera
- Houthi Attacks on Saudi Arabia Open a Second Front in Oil Supply Risk — StoneX