Brent Crude Surges to $109.86 on Houthi Strikes and Middle East Supply Risks

Brent crude oil reached $109.86 per barrel (+3.72%) on October 16, breaking through $110 for the first time since May. WTI crude hovered near $101. The rally was driven by Houthi attacks on Yanbu, a critical Saudi export hub, and reports of two tankers being struck in the Persian Gulf. On Sunday, Brent eased 1% to $108.80, even as Ukraine reportedly attacked Russian crude facilities.

Houthi strikes on strategic Middle East infrastructure have revived supply risk premium in oil markets. Traders fear sustained disruption to export flows, which would tighten global supply and push prices higher. Higher oil prices threaten to reignite inflation and complicate the Fed's rate path, supporting the US dollar but weighing on equities and emerging markets that face higher import costs.

Houthi-linked disruptions have haunted oil markets since 2024, creating a $70–115 trading range. The current $109 level is elevated but not yet critical; true damage would require proven closure of Yanbu or a major Gulf route, which could push prices past $115. OPEC+ retains flexibility to release reserves if needed. The key watch items: the realized risk premium in crude futures, actual Saudi export volumes, and OPEC+ signaling at its next scheduled meeting. Geopolitical premium often fades once supply chains prove resilient.