Energy
Oil Hovers Near April Highs as Houthi Strikes Counter Tehran Diplomacy
Image: SatyaPrem via Pixabay
Brent swings around $115 a barrel as talks in Tehran ease some supply fears while renewed attacks on Saudi Arabia keep them alive.
By Emmanuel Cruz ·
Oil prices swung in a narrow range on Tuesday, holding close to their highest levels since April, as signs of diplomacy between Iran and its neighbors were weighed against renewed Houthi attacks on Saudi Arabia, a key oil producer [1].
Brent crude futures were up 40 cents, or 0.4%, at $116.24 a barrel as of 07:18 GMT, while U.S. West Texas Intermediate crude rose 30 cents to $102.07, Reuters reported [1]. Both benchmarks had fallen about 1% earlier in the session before turning higher [1]. On Monday, Brent settled at $115.81, down 91 cents, and WTI fell $1.51 to $101.76 [2]. Brent closed Friday at $116.72, its highest close since April, capping a 6% weekly gain [2].
The pull in both directions comes from two developments. On Monday, Saudi Defence Minister Prince Khalid bin Salman, Pakistan's army chief Field Marshal Asim Munir and Turkish intelligence chief Ibrahim Kalin met Iranian leaders, including President Masoud Pezeshkian, in Tehran [2]. According to Iranian state media, the countries agreed to keep talking about cooperation on peace and security [1]. That raised hopes of easing a conflict that has disrupted Gulf energy flows since February [1].
At the same time, the Houthis said they struck pumping stations on Saudi Arabia's East-West crude pipeline and Riyadh airport over the weekend, claims Saudi Arabia had not immediately confirmed [2]. The Saudi-led coalition said on Monday it destroyed three drones aimed at Riyadh and the kingdom's southern regions, and the strikes followed an October 21 drone attack on the Shaybah oil field [2].
Shipping risks remain high. October was the worst month since 2017 for attacks on commercial shipping in the Strait of Hormuz and nearby waterways, according to a Washington-based think tank cited by Reuters [1]. Before the conflict began, the strait carried about a fifth of global energy supplies [1]. ANZ Research said Gulf crude exports fell for a fourth straight week, with Hormuz flows running at about 60% of normal and global distillate inventories nearly 5% below their five-year average [1]. In the United States, Strategic Petroleum Reserve stocks fell to 282.6 million barrels last week, the lowest since October 1982, according to Department of Energy data cited by Oil & Gas Middle East [2].
The political backdrop is also unsettled. U.S. President Donald Trump told Fox News it was getting close to the point of choosing between a deal with Tehran and further military action, and hinted that strikes could resume after the November 3 midterm elections, according to Bloomberg reporting cited by Oil & Gas Middle East [2].
"Prices remain elevated amid persistent geopolitical uncertainties," said Sugandha Sachdeva, founder of New Delhi research firm SS WealthStreet [1]. Francisco Blanch of Bank of America told Bloomberg TV that if Iran resumes attacks on regional infrastructure, $120 a barrel is "probably on the cards on average for the next few months" [2].
Why it matters for markets: high fuel costs feed directly into inflation, which is the Federal Reserve's main concern heading into its decision on Wednesday. KPMG chief economist Diane Swonk said diesel costs and energy supply disruptions are likely to push up consumer prices into December, and the firm expects the Fed to raise rates again that month [3].
What to watch next: any follow-up to the Tehran talks, confirmation of damage to Saudi pipeline infrastructure, tanker traffic data for the Strait of Hormuz, and the Fed's statement on Wednesday.
Sources:
[1] Reuters via Business Recorder, "Oil rises slightly as diplomacy hopes counter renewed Houthi attacks", October 27, 2026. https://www.brecorder.com/news/40446084
[2] Oil & Gas Middle East, "Brent crude slips below $115 a barrel (about AED 422) as Tehran talks offset Houthi strikes on Saudi Arabia", October 27, 2026. https://www.oilandgasmiddleeast.com/news/brent-crude-tehran-talks-houthi
[3] KPMG, "Fed paces itself", October 22, 2026. https://kpmg.com/us/en/articles/2026/october-2026-fed-primer.html
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.