Oil prices rose nearly $2 a barrel on Monday as Middle East security risks outweighed a fresh promise of Russian diesel. Brent crude futures settled up $1.93, or 1.8 per cent, at $106.65 a barrel, the highest since 15 September, Reuters reported. West Texas Intermediate settled at $93.74, up $1.89, or 2 per cent.
The move followed a Saturday Houthi missile strike on Riyadh's international airport that killed 13 people and wounded more than 300, with further attacks on Sunday, and a run of tanker incidents in and around the Strait of Hormuz that UK Maritime Trade Operations has been logging this month.
Two shipping incidents, one airport
UKMTO reported a tanker struck by a drone near Oman's Sohar and another damaged while transiting Hormuz, according to the Reuters account carried on 12 October. Those reports sit on top of a week in which Kpler had already counted a high number of tanker strikes around the strait, and in which Indian officials confirmed the Marshall Islands-flagged MT Valthera was hit by a projectile in the strait on 11 October with its crew safe.
Separately, Iran-aligned Houthis claimed the Riyadh airport attack. Investor Louis Navellier said in a note cited by Reuters that Saudi refineries were operating but that five had been temporarily closed when a pipeline to the Red Sea was shut after earlier missile attacks. The combination matters because Saudi Arabia can route some crude west through Yanbu when Hormuz is risky; airport and pipeline strikes raise the cost of that workaround.
SEB commodities analyst Bjarne Schieldrop told Reuters that the sense of some kind of normality of Hormuz exports was shattered last week, and that fresh Houthi attacks on Saudi Arabia added to the lift in prices. Hard choices over what to defend, he said, will increasingly have to be made across oil infrastructure, military sites, palaces, civilian airports and other targets.
Diesel relief that did not clear the tape
The price rise came even as President Trump hailed a deal for Russia to supply more than 300,000 metric tons of diesel immediately to US and global markets, with more to follow, and announced a Russia-Ukraine ceasefire covering energy infrastructure. ICE gasoil futures fell 2.3 per cent to $1,449 a metric ton on the diesel news. Ukrainian President Volodymyr Zelenskiy accused Russia of violating the energy ceasefire on Monday; Russia did not comment in the Reuters report.
Analysts were sceptical that the diesel volumes would force prices down quickly. Jim Ritterbusch of Ritterbusch and Associates said the release would develop gradually and did not appear capable of much additional downside before the US midterm elections in three weeks. PVM's Tamas Varga said Russia's refining capacity has been severely reduced, though Moscow has partially lifted its diesel export ban to allow about 500,000 tons onto the market, roughly one day of US consumption.
The International Energy Agency's Fatih Birol said members should assess whether additional diesel releases are necessary and that countries behind on pledged volumes should accelerate them, prioritising diesel.
Risk premium, not a full shutdown
Goldman Sachs raised its December Brent forecast to $90 a barrel from $85, estimating a risk premium of just over $20, according to the same Reuters report. WTI would likely stay soft versus Brent on high US-Europe shipping costs, averaging $81 in December 2026 and $73 in 2027 in that note.
That framing treats Monday's settle as insurance pricing, not as proof that Gulf barrels have stopped. September had seen a partial recovery in Middle East crude exports. Fresh tanker hits and Saudi airport strikes reverse the narrative that the strait was normalising. Freight, war-risk premia and self-sanctioning by cautious owners can tighten the market even when AIS still shows some transits.
In the US Gulf, Shell, Chevron and BP were working to restore production after Hurricane Isaias made landfall early Saturday, a separate supply cut that had already supported prices late last week.
Physical flows through the strait remain the variable that paper markets cannot ignore. IMF PortWatch and AIS trackers have shown transit counts far below the pre-crisis baseline of roughly 85 ships a day for stretches of this year. A Monday settle above $106 does not require a formal closure. It only requires that enough owners slow-steam, wait for escorts or refuse fixtures until war-risk quotes come down. Each day of delay is a floating inventory that arrives late to Asia and Europe.
Product markets felt the opposite impulse from the Russian diesel announcement, which is why gasoil could fall while crude rose. That split will not last if tanker risk spreads from crude carriers into product carriers leaving Gulf and Red Sea ports. Diesel that cannot sail is diesel that does not ease cracks in Northwest Europe or the US East Coast. Birol's call for faster strategic releases is aimed at that product layer, not at the Brent complex itself.
For OPEC+ members that held November quotas flat on 4 October, Monday's tape is ambiguous. Higher prices reward restraint, but they also raise the political cost of under-delivering on paper ceilings when Gulf loadings are already constrained. Spare capacity that cannot clear Hormuz is not spare capacity China or India can book. The next monthly OPEC+ call on 1 November will land after another three weeks of UKMTO traffic and another three weeks of Saudi and Iranian claims about who hit which hull.
For refiners and airlines, the Monday settle feeds straight into crack and jet-fuel maths. A crude complex that holds above $100 while diesel gets a temporary Russian bid creates an awkward week for product importers that hedged on hopes of a soft October. If Hormuz insurance keeps climbing, those hedges will look early.
What to watch
Four markers will show whether $106 is a spike or a floor. UKMTO and insurer notices will show if tanker hits continue through the week. Saudi loading data will show whether Red Sea and Gulf volumes hold. Diesel crack spreads will show whether Russian barrels and any IEA releases actually loosen products. Brent's discount or premium to Dubai and Oman grades will show how much of the risk is Gulf-specific. Until those calm down, the market is pricing disruption as the base case, not the tail.