Brent hits US$110 a barrel on October 16 over supply fears
Brent settled at US$109.86 as Middle East tensions and Russian diesel supply concerns grew, while governments moved to release reserves
- The price increase was driven by fears of supply disruptions from the Middle East, following a missile attack near a key Saudi oil port and intensified Iranian attacks in the Strait of Hormuz.
- Concerns over Russia's ability to deliver diesel fuel grew after a Ukrainian drone attack shut down a primary unit at a major Russian refinery.
- The combination of escalating conflict in the Middle East and reduced Russian refining capacity were the two main factors traders cited for the price surge.
Brent crude returned to US$110 a barrel during trading on October 16, 2026, for the first time since May, as concerns about Middle Eastern supplies and Russia’s ability to deliver diesel lifted global oil prices.
Brent ended the session at US$109.86 a barrel, up US$3.94, or 3.7%, and its highest settlement since May 19. US West Texas Intermediate (WTI) crude gained US$3.44, or 3.5%, to close at US$101.41 a barrel, its highest since September 17.
For the week to October 16, Brent had gained 4.9%, while WTI was up 10.4%.
WTI had already risen more than 3% on October 15, while Brent was little changed. The US benchmark’s advance followed reports that Washington was considering easing restrictions on the so-called “shadow fleet” of tankers, alongside a sharp fall in US crude inventories linked to hurricane-related production shutdowns.
Saudi-led coalition reports intercepting missile bound for Yanbu
A Saudi-led coalition said it had intercepted and destroyed a ballistic missile launched towards Yanbu, Saudi Arabia’s Red Sea city. Initial reports indicated no damage to the city’s infrastructure, according to consultancy Rapidan Energy Group.
Yanbu’s port is an important route for Saudi oil exports because it allows shipments to reach international markets without passing through the Strait of Hormuz.
“WTI and Brent reversed earlier losses as escalation fears resurfaced amid rumours of attacks on Saudi energy infrastructure,” research and consultancy firm Energy Aspects wrote in a note.
Energy Aspects also cited unverified Israeli reports that Iran might be preparing a pre-emptive strike after Western intelligence detected unusual military movements. The consultancy argued that continuing escalation risks would support outright oil prices.
Attacks around the Strait of Hormuz had intensified over the 10 days to October 16. Iran said it was increasing strikes in response to the US blockade of its ports and tighter sanctions introduced in September.
“Intensified Iranian attacks drove Gulf crude flows sharply lower,” Kpler analysts wrote in an October 15 report. Without a comprehensive political agreement, the analysts expected the recovery in flows through the Strait of Hormuz to be slower and more uneven.
Sources report Ryazan refinery unit shutdown after drone attack
A primary crude distillation unit at Russia’s Ryazan refinery stopped operating following a drone attack in the region on October 15, two industry sources told Reuters.
Ukraine struck a Russian oil refinery on October 15 after Ukrainian President Volodymyr Zelenskiy announced that Kyiv was abandoning a ceasefire covering energy sites. US President Donald Trump had announced the ceasefire, and Zelenskiy criticised Trump’s willingness to reach deals with Moscow.
“Conflict in the Middle East still keeps coming back and I think it’s questionable how much diesel fuel Russia can actually deliver to the markets. Those two factors are just continuing to have traders be buyers,” said Dennis Kissler, senior vice president of trading at BOK Financial.
US seeks exchange of up to 17 million barrels from oil reserve
The US Department of Energy announced on October 16 that it had issued a request for proposals for an exchange of up to 17 million barrels of crude oil from the Strategic Petroleum Reserve.
The International Energy Agency (IEA) agreed on October 15 to accelerate emergency stock releases, including more than 20 million barrels of diesel, to increase supplies.
Washington had previously committed to lending 172 million barrels from the Strategic Petroleum Reserve as part of an agreement involving about 30 countries in the IEA to release 400 million barrels from reserves worldwide.
