Brent tops US$111 for first time since May on Saudi claims

Brent crude rose to US$111.05 a barrel on Tuesday, its highest level in five months, after Yemen’s Houthi movement claimed attacks on Saudi Arabian targets and tanker traffic through the Strait of Hormuz stayed sharply reduced, Inspenet reported.

The move matters for Canadians because gasoline was already 27.8 per cent more expensive in September than a year earlier, Statistics Canada said, pushing annual inflation to 3.1 per cent.

Brent futures eased back to about US$110.80 by 08:10 GMT, up US$1.25 or 1.1 per cent on the day, Inspenet said. Brent had settled at US$109.55 on Monday, down 31 cents, after falling by more than US$3 earlier in the session as traders took profits, according to a Reuters report cited by FinanceFeeds. Friday’s settle of US$109.86 was the highest since May. Outlets quote slightly different Tuesday levels depending on the contract and the hour.

West Texas Intermediate, the North American benchmark, settled the November contract at US$103.66 on Monday, up 2.2 per cent and the highest since Sept. 15, Reuters reported. The December contract settled at US$98.54.

The Houthis said Monday they attacked Saudi sites. Anadolu Agency reported that spokesman Yahya Saree named the Shaybah oilfield, King Khalid International Airport in Riyadh and Abha International Airport in a Telegram statement. FinanceFeeds and Inspenet also listed an Aramco facility in Yanbu.

Saudi authorities had not confirmed the claims, and Reuters said it could not verify them. Inspenet reported no official confirmation of damage to oil facilities or interruptions in crude production. Anadolu said the claims alone do not establish whether the sites were hit or whether production or exports were affected.

The risk premium comes from the Gulf as well. Iran’s Revolutionary Guards said an oil tanker caught fire and exploded after hitting a naval mine on Sunday, according to Reuters. Iran has also warned of a “firm response” against vessels that switch off navigation and identification systems, Anadolu reported, citing the force. Anadolu does not independently verify either account.

Data firm Kpler estimated crude flows through the region at about 8.5 million barrels a day over the past seven days, down from more than 20 million the week before, with at least 10 confirmed incidents involving commercial vessels, Reuters reported. Inspenet, also citing Kpler, said at least 18 ships were attacked in the previous two weeks. The counts differ because they cover different periods.

Washington’s response has not calmed the market. President Donald Trump’s Friday order waiving some sanctions and tariffs on Russian energy exports remains in place, but Phillip Nova’s Priyanka Sachdeva said it did little to address supply disruptions in Hormuz, according to FinanceFeeds. Bjarne Schieldrop of SEB warned that higher Hormuz export volumes may prove short-lived because Iran could escalate attacks before the Nov. 3 U.S. midterm elections, Reuters reported.

In Canada, Bank of Canada Governor Tiff Macklem has said high energy prices will lift the bank’s inflation outlook. He told a panel at the IMF and World Bank meetings that the central bank has looked past energy-driven price increases so far, but that gets harder with time. "The longer this goes, the harder that gets," he said, Reuters reported. The bank publishes new forecasts with its Oct. 28 rate decision.

Higher global prices do not flow evenly to Alberta producers. The discount on Western Canadian Select to WTI widened to US$27 a barrel on Oct. 16, the widest since 2023, which limits what oilsands operators capture from the rally.

Egypt has said it is ready to support Saudi Arabia against the Houthis, and its parliament has delayed a vote on military assistance until Oct. 26, Reuters reported. The U.S. Federal Reserve meets Oct. 27 and 28, and the U.S. Energy Information Administration publishes its weekly inventory report Wednesday.

Via Inspenet, FinanceFeeds (citing Reuters) and Anadolu Agency.

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