Oil slides toward $104 as Saudi Red Sea exports rebound

Summary

• Brent fell 1.6% to $104.39 as Middle East supply fears eased.
• Saudi exports through Bab el-Mandeb returned to roughly 1.5 million barrels a day.
• Prices remain more than 70% higher this year on war-driven disruption.

The latest

Brent crude slid 1.6% to $104.39 a barrel in Singapore trading as fears of Middle East supply disruption receded, with West Texas Intermediate down 1.3% to $93.83. Saudi shipments through the Bab el-Mandeb strait have recovered to about 1.5 million barrels a day, while the International Energy Agency cut its forecast for global oil consumption this year by 2.6 million barrels a day.

Details

• The price move: December Brent futures fell 1.6% to $104.39 a barrel as of 10:21 a.m. Singapore time, after gaining 1.3% over the first three sessions of the week. November WTI dropped 1.3% to $93.83, according to Bloomberg.
• Saudi exports: Shipments through Bab el-Mandeb returned to roughly 1.5 million barrels a day after at least six loaded tankers sailed from Yanbu, according to shipping-tracking data through October 12. Houthi missile and drone attacks on Saudi Arabia have continued without a clear hit to supply.
• The demand cut: The International Energy Agency lowered its forecast for global oil consumption this year by 2.6 million barrels a day, a downgrade 100,000 barrels a day deeper than the one it issued a month earlier.
• The analyst view: Takahiro Asaoka, chief economist at the Itochu Research Institute, told Bloomberg that Houthi attacks had not caused the severe supply disruption the market feared, "which has pushed part of the geopolitical risk premium to fade." He said the weaker IEA demand outlook added downward pressure.
• Still tight: The market remains short after months of disruption from the US-Iran war, which drove Brent up more than 70% this year. Buyers have drawn down stockpiles, pushing onshore inventories near their lowest in at least a decade, the agency said.
• Shipping strain: Vessels capable of carrying at least 37 million barrels have halted or diverted while heading toward loading areas off the UAE and Oman, though there is no clear evidence Gulf flows have fallen.
• Washington's option: The United States is weighing an easing of sanctions on shadow-fleet vessels that carried oil from countries including Russia, Iran and Venezuela, to lower global freight rates, a US official told Reuters. Whether companies would use those ships is unclear.
• Tehran's position: Iranian parliament speaker Mohammad Bagher Ghalibaf said Iran's aim is neither an endless war nor drawn-out talks, but exhausting the enemy until it is forced to accept Tehran's demands. He set no timeline for any diplomatic track.
• US inventories: The American Petroleum Institute, funded by the oil industry, reported nationwide crude stockpiles fell 11.1 million barrels last week, according to a document seen by Bloomberg. Official data due Thursday would confirm the largest drawdown since June 2025.
• Elsewhere: UAE oil production climbed to record levels last month, the IEA said. Russia accused Ukraine of striking two refineries on Wednesday in violation of the energy-sector ceasefire promoted by President Donald Trump; Kyiv denied the claim.

Background

The Saudi-led coalition in Yemen said Thursday it intercepted and destroyed a drone over the kingdom's Eastern Province. Houthi forces backed by Tehran have kept up missile and drone strikes on Saudi territory throughout the period in which exports resumed.

Between the lines

The rebound in Saudi loadings and the IEA's demand downgrade explain the day's selloff, but neither resolves the underlying squeeze: onshore stocks near decade lows and 37 million barrels of tanker capacity idling or diverting. Rob Barnett, senior energy analyst at Bloomberg Intelligence, assessed that uncertainty points to a prolonged frozen conflict, with positive turns followed by fresh attacks, and said a return to active fighting could push prices much higher.

What's next

Official US inventory data is due Thursday and would confirm whether the 11.1 million-barrel drawdown is the largest since June 2025. Also watch Washington's decision on shadow-fleet sanctions and tanker traffic off the UAE and Oman.

Source: Bloomberg, Reuters, International Energy Agency, American Petroleum Institute