Oil Prices Hold Near $105 As Geopolitical Risks Mount

Oil prices remained relatively rangebound, with ICE Brent finding an equilibrium point around $105 per barrel amid frequent Hormuz transits and Iranian drone attacks, according to OilPrice. Production shut-ins from Hurricane Isaias ceased to provide bullish support as total offline capacity in the US Gulf of Mexico dipped to 200,000 b/d by Friday.

Geopolitical Conflicts and Infrastructure Risks

Markets continued to monitor multiple geopolitical flashpoints, including conflicts involving the US and Iran, Russia and Ukraine, and Saudi Arabia and Yemen's Houthis. Houthi drone strikes caused extensive damage to Saudi Aramco's Dhahran headquarters, prompting vows of further attacks on energy facilities. Meanwhile, Ukraine resumed attacks on Russian refineries following the collapse of a brief energy truce, striking Rosneft's 340,000 b/d Ryazan plant.

Supply Balances and Market Outlook

On the supply front, the International Energy Agency warned that global diesel tightness would extend into 2027, with persistent shortages preventing stock rebuilds before the third quarter of 2027 as diesel production fell 1.7 million b/d year-on-year to 27.2 million b/d. Chinese refined product exports surged to a four-year high of 1.88 million b/d in September before halving in October.

Key facts

• ICE Brent crude oil traded near $105 per barrel.
• US Gulf of Mexico offline production capacity dipped to 200,000 b/d by Friday.
• Global diesel production fell by 1.7 million b/d year-on-year to 27.2 million b/d.
• Chinese refined product exports reached 1.88 million b/d in September.