Key facts
- Houthi attacks are threatening Saudi oil infrastructure and Gulf shipping lanes.
- Brent crude futures are hovering near $105 per barrel.
- US President Trump's energy policies are creating political challenges ahead of midterm elections.
- OPEC has significantly lowered its oil demand growth forecast for the year.
- Shell agreed to acquire a 30% interest in Equinor's Bay du Nord offshore oil project.
- A landslide at Chile's El Teniente copper mine killed two contractors and halted operations.
Saudi Arabia is increasingly becoming a focal point for supply risks in the oil market this month, with Houthi attacks disrupting operations at Riyadh airport and posing a threat to the kingdom's energy infrastructure. Concurrently, missile strikes targeting tankers in the Strait of Hormuz are creating uncertainty for Gulf shipping flows. This situation is occurring while attention is also drawn to the US-Russia diesel deal. The escalating Saudi-Houthi conflict is expected to define the trading range for Brent crude, which is currently hovering around $105 per barrel.
US President Trump has lifted sanctions on Russian diesel exports, with Moscow agreeing to supply increasing volumes through the end of 2026. However, this move, along with broader energy policies, is creating political challenges for the White House, particularly concerning fuel prices ahead of midterm elections. Despite inflation-adjusted fuel prices not yet surpassing 2022 levels, public perception links the crisis to Trump's foreign policy decisions. Furthermore, Trump's support for data center construction is becoming a potential electoral liability due to soaring US power prices.
OPEC has significantly revised its oil demand forecast, slashing this year's growth projection to 400,000 b/d and deferring the recovery in global consumption to 2027. This contrasts sharply with the IEA's earlier forecast of a 1.6 million b/d contraction. In response to Hurricane Isaias, which shut down 70% of offshore output at its peak, the US Energy Department authorized an emergency exchange of up to 4 million barrels of crude to support refinery operations on the Gulf Coast.
The World Petroleum Congress in Saudi Arabia saw the absence of top executives from major energy companies like ExxonMobil, Shell, and Chevron due to security concerns stemming from Houthi attacks on Riyadh. President Trump announced an energy truce between Russia and Ukraine, though Ukrainian President Zelenskyy stated he had no details of such an agreement. Meanwhile, a landslide at Chile's El Teniente copper mine, triggered by heavy rainfall, killed two contractors and halted operations, causing a rebound in LME copper prices to $14,620 per tonne.
Spanish LNG importers have ceased Russian gas imports, replacing them with supplies from the US, which accounted for a record 48% of Spain's gas in September. Saudi Aramco is planning to increase its Hormuz bypassing capacity by 3 million b/d by 2030. China's Shanghai International Port Group is reportedly in talks to acquire LME-approved warehousing firm H&M Metal Warehousing to expand its exposure to LME data and flows. The International Energy Agency is considering further releases of diesel from strategic stocks. Nigeria's Dangote refinery has extended its share offering to October 27. Shell Australia warned that government plans to mandate LNG export reserves could lead to market failure. The French government is increasing its stake in Eramet, a strategic metals producer. A Kazakh court upheld a $5.2 billion environmental fine against the Kashagan field consortium. China will reduce its export tax rebate on new energy vehicles.