Oil settles lower on peace hopes, Saudi attacks limit losses

Published Tue, Oct 27, 2026 · 06:12 AM

[NEW YORK] Brent crude futures finished lower on Monday (Oct 26) amid hopes of easing hostilities in the Middle East, but persistent attacks on key producer Saudi Arabia and maritime shipping kept investors wary and prices hovering near six-month highs.

Brent finished the day down US$0.91, or 0.8 per cent, at US$115.81 a barrel while US West Texas Intermediate (WTI) crude futures closed down US$1.51, or 1.46 per cent, at US$101.76 a barrel.

Both benchmarks retreated after strong gains on Friday, when Brent settled more than US$3 higher to post a weekly gain of 6 per cent, while WTI rose 2.3 per cent for the week.

Investor focus remained on tensions in the Middle East after Yemen’s Iran-aligned Houthis said they struck pumping stations on Saudi Arabia’s East-West crude oil pipeline and Riyadh airport over the weekend. There was no immediate Saudi confirmation of the Houthi attacks.

The Saudi-led coalition in Yemen, however, said on Monday it had destroyed three drones targeting Riyadh and the kingdom’s southern regions.

Hopes for a diplomatic breakthrough in the Middle East conflict, which began with US and Israeli strikes on Iran and later spread to Saudi Arabia and Yemen, weighed on oil prices earlier in the session, with Brent falling more than US$2 a barrel.

Qatari mediators travelled to Teheran on Sunday in coordination with the US to seek ways to ease regional tensions, according to an official briefed on the matter.

Saudi Arabia, Turkey and Pakistanheld talks with Iranian officials in Teheran on Monday as part of efforts to prevent further escalation in the region.

The talks were the first high-level contact between Iran and the three nations, which signed a mutual defence pact in August.

At the conclusion, the four countries agreed to continue talks with a view to strengthening cooperation in peace and security, Iranian state media reported.

Egypt’s parliament authorised President Abdel Fattah al-Sisi to take “all necessary measures” to help Saudi Arabia defend itself, raising the prospect of Egyptian military support for the kingdom.

Worst month for maritime attacks

The effects of the US-Israeli war with Iran that began on Feb 28 continue to reverberate as companies adjust to the disruptions of commercial shipping through the Strait of Hormuz and Bab el-Mandeb Strait caused by the conflict.

October has been the worst month for attacks on commercial shipping in the Strait of Hormuz and nearby waterways, according to data compiled by the Washington Institute for Near East Policy, a think tank that has tracked maritime security incidents worldwide since 2017.

An oil spill from a strike-damaged tanker off the coast of the United Arab Emirates has widened, satellite images showed, triggering more beach closures and raising environmental concerns.

The United Kingdom Maritime Trade Operations agency said on Monday it had received third-party reports of a vessel on fire near Al-Faw, Iraq, adding that the crew’s status, extent of any damage and any environmental impact were unknown.

Elsewhere, Russian refiners are raising diesel production in October after the government granted export quotas following the Kremlin’s supply agreement with the US, two industry people close to the matter said.

Energy ministers from Saudi Arabia and Singapore said state-owned oil company Saudi Aramco would start storing crude oil in Singapore from the second half of 2027, to make Aramco’s supply chain in the region more resilient.

The head of the International Energy Agency, Fatih Birol, reiterated supply concerns, saying on Monday at an industry event in Singapore that he did not expect energy markets in 2027 to return to where they were before the Iran war.

In the US, stocks of crude oil in the Strategic Petroleum Reserve fell to 282.6 million barrels last week, the lowest level since October 1982, the Department of Energy said on Monday. REUTERS