US crude gains 3% on October 28 as Middle East supply fears deepen
Oil rose on Yemen fighting and a claimed Saudi refinery strike, while US crude stocks fell 1.9 million barrels in the week to October 23.
- US West Texas Intermediate crude oil prices increased by about 3% on October 28, closing at $102.78 a barrel.
- The price surge was driven by fears of Middle East supply disruptions, fueled by fighting in Yemen, a claimed Houthi missile strike on a major Saudi refinery, and potential US military action against Iran.
- An unexpected drop of 1.9 million barrels in US crude inventories also contributed to the price increase, contrasting with analysts' forecasts of a small build.
Brent crude settled at US$115.32 a barrel on October 28, 2026, as fighting in Yemen and a Houthi claim of a missile strike on a Saudi refinery renewed fears of disruption to Middle Eastern oil supplies. Concerns about possible US strikes on Iran after the November 3 midterm elections also supported prices.
Brent futures gained US$1.44, or about 1%, during the October 28 session, while US West Texas Intermediate crude advanced US$2.88, or about 3%, to close at US$102.78 a barrel.
Brent’s rise took the benchmark back into overbought territory for the fourth time in five days.
Houthi attacks and refinery claim heighten supply concerns
Yemeni government forces reported a Houthi attack on Aden airport on October 28, following an evacuation warning from the Iran-aligned group. Fighting has intensified in impoverished Yemen as the country has become embroiled in the wider Middle East conflict.
The Houthis claimed on October 27 that a missile had struck Saudi Arabia’s largest oil refinery, which has a capacity of 550,000 barrels per day. Saudi authorities did not immediately confirm the claim, which marked a further escalation in Houthi strikes against the world’s second-largest crude producer after the US.
“Crude futures once again pricing in nearer term tighter supplies on news the US is likely to re-start military operations soon, which could be more intense than in the past given the latest attacks on Saudi Arabia and other Middle East allies,” Dennis Kissler, senior vice president of trading at US financial services firm BOK Financial, wrote in a note.
Several analysts have suggested in recent weeks that renewed US strikes on Iran could follow the November 3 US midterm elections.
Qatar’s mediation effort draws conflicting accounts
Qatari mediators have presented Iran with a new draft agreement aimed at ending the eight-month war with the US and Israel, according to an official briefed on the negotiations. A senior Iranian official disputed that account, describing Doha’s proposals as unacceptable ideas that did not constitute an offer.
Iran’s foreign minister maintained on October 28 that Tehran was allowing diplomacy an opportunity to succeed. The minister also suggested that Iran’s proposed seven-day plan could be completed in less than a week if implemented.
Qatar and Pakistan have led efforts to mediate an end to the war, which has disrupted international shipping and oil supplies and spread to Saudi Arabia and Yemen.
US crude inventories fall unexpectedly by 1.9 million barrels
The US Energy Information Administration reported on October 28 that energy companies had withdrawn 1.9 million barrels of crude from storage during the week ended October 23. The decline supported oil prices and contrasted with the 15,000-barrel increase forecast by analysts in a Reuters poll.
American Petroleum Institute data released on October 27 had indicated a similar decline of 2 million barrels for the week, according to sources cited by Reuters.
OPEC+ expected to keep December production targets unchanged
The Organization of the Petroleum Exporting Countries and allied producers, collectively known as OPEC+, are expected to maintain their December output targets at a meeting on November 1, according to people familiar with the matter.
Most of the seven core OPEC+ members are producing below their targets. Those countries are Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman.
China has issued a fourth batch of export quotas for petrol, diesel and jet fuel, three people familiar with the matter disclosed on October 28. The unusual additional allocation brings China’s total for 2026 into line with 2025, despite restrictions earlier in the year.
Russian crude exports through Baltic and Black Sea ports could decline in November as domestic refineries increase diesel production following an agreement with Washington in October, traders said.
