Oil prices showed mixed movements on Monday, reacting to geopolitical tensions in the Middle East and policy shifts in the U.S. Brent crude futures fell 31 cents, or 0.3%, to settle at USD109.55 a barrel, after earlier losses of more than USD3 as investors took profits from last week’s rally. Meanwhile, U.S. West Texas Intermediate (WTI) crude gained USD2.25, or 2.2%, to USD103.66 a barrel, marking its highest settlement since September 15.
Trading activity was focused on the December contract, with over 195,000 lots traded, compared to just 26,000 in the expiring November contract. The December contract settled at USD98.54, down 0.5%. Yemen’s Houthis claimed responsibility for attacks on Saudi energy, airport, and military facilities, including an Aramco facility in Yanbu and the Shaybah oilfield. Saudi authorities did not immediately confirm these claims, and Reuters could not verify them independently.
Separately, an oil tanker caught fire and exploded after hitting a naval mine in the southern Strait of Hormuz on Sunday, according to Iran’s Revolutionary Guards. Crude flows through the region dropped to a seven-day average of about 8.5 million barrels per day last week, down from over 20 million bpd the previous week, due to increased threats to commercial shipping. Analyst Bjarne Schieldrop of SEB predicted that any increases in export volumes through Hormuz may be short-lived as Iran could escalate attacks ahead of the November 3 U.S. midterm elections.
Egypt offered support to Saudi Arabia against the Houthis, though its parliament delayed a vote to authorize military assistance until October 26. Earlier on Monday, a Houthi attack on a Yemeni government security force training camp in Shabwa province killed 53 people and injured 200. U.S. President Donald Trump signed an executive order waiving some sanctions and tariffs on Russian energy exports, aiming to lower energy prices ahead of the November elections. However, analysts noted that the waiver’s impact on supply remains uncertain.