Saudi Aramco evacuated staff from its Dhahran headquarters amid intensifying clashes involving Saudi forces and Yemen’s Houthi militants, raising fresh concerns over Brent crude prices, oil infrastructure and shipping through the strategically vital Bab el-Mandeb Strait.
BY PC Bureau
October 23: Geopolitical tensions in the Middle East and a disruption to oil production in Libya drove Brent crude prices higher on Friday, extending the previous session’s nearly 4% rally and pushing Brent crude to a five-month high.
December Brent crude futures rose 65 cents, or 0.57%, to $113.82 a barrel by 7:15 a.m. IST. The contract had closed on Thursday at its highest level since May 4 and appeared on course for a third consecutive weekly gain as traders assessed growing threats to key oil supply routes.
Saudi Aramco evacuated staff from its headquarters in Dhahran on Thursday after fighting intensified between Saudi forces and Yemen’s Houthi militants, Reuters reported. The escalation heightened concerns over the security of Saudi oil infrastructure and the potential disruption of energy supplies across the region.
The clashes also renewed attention on the Bab el-Mandeb Strait, one of the world’s most strategically important maritime chokepoints. Located between Yemen on the Arabian Peninsula and Djibouti and Eritrea in the Horn of Africa, the narrow passage connects the Red Sea with the Gulf of Aden and the wider Indian Ocean.
Why the Bab el-Mandeb Strait matters for Brent Crude pricing
The strait serves as a critical gateway for commercial shipping travelling between Asia and Europe through the Red Sea and the Suez Canal. It carries oil, petroleum products, containerised cargo and other goods, making it an important link in global energy supplies and international trade.
Any significant disruption to shipping through the passage could force vessels to reroute around the Cape of Good Hope at the southern tip of Africa. The longer journey would increase transit times, fuel consumption, freight charges and insurance costs, potentially adding to global inflationary pressures.
Houthi attacks or threats against commercial vessels in the Red Sea have previously disrupted shipping and prompted companies to reconsider routes through the region. A further escalation could complicate oil shipments and raise concerns about the reliability of supplies reaching international markets. However, heightened security risks do not necessarily mean the strait has been closed.
Supply concerns were also fuelled by developments in Libya. The head of the country’s National Oil Corporation told Reuters on Thursday that a pipeline valve linking the Hamada and Tahara oilfields to Zawiya port had been shut, disrupting production at both fields.
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This is CONCERNING.
The US is pulling some troops and diplomats out of its Middle East posts as Trump weighs new military action in Iran, per NBC.
We’ve seen this before.
In January and February, the US pulled troops from its Middle East bases as Trump weighed strikes on Iran.
On February 28, the US and Israel struck Iran.
Here’s how markets reacted:
1. Brent crude jumped 27% in a week, from $73 to $93 a barrel
2. Brent closed as high as $114 on May 4, up 57% from before the strikes
3. Bitcoin fell to about $63,000 on the day of the strikes, then rallied nearly 18% in four days
Brent is still up 49% since the war began.
Meanwhile, Trump has said the US “will not be attacking Iran” before the November 3 midterms.
— Coin Bureau (@coinbureau) October 21, 2026
Russia remained another important factor for oil markets. Moscow indicated on Wednesday that it was open to resuming US-brokered talks with Ukraine next month, following a meeting between Russian President Vladimir Putin and US envoy Steve Witkoff in St Petersburg.
Ukrainian President Volodymyr Zelenskyy said he hoped discussions could begin in early November. Russia was the world’s third-largest crude oil producer in 2025, behind the United States and Saudi Arabia, according to US energy statistics.
Progress towards a diplomatic settlement could ease concerns over Russian oil supplies and reduce some of the geopolitical risk premium embedded in prices. However, uncertainty surrounding the war and sanctions on Russian energy exports continues to cloud the global supply outlook.
With tensions in the Middle East, production disruptions in Libya and uncertainty over Russia’s energy trade converging, oil markets remain sensitive to developments that could tighten supplies. Any further deterioration in the security of key shipping routes or additional production losses could sustain upward pressure on crude prices.
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