Reading Gulf anxiety in the oil price
USO•Diplomatic talks have done little to ease Gulf tensions as the United States and Iran trade warnings, while Brent crude has moved with news of negotiations and attacks. Brent settled at $116.72 on Friday, fell 1.7% on Tuesday and traded near $115 on Wednesday.
1. Oil tracks Gulf tensions
Diplomatic efforts have not eased anxiety in the Gulf, where the United States may strike Iran again and Iranian security officials have warned of retaliation. Brent settled at $116.72 on Friday, its highest since April, after reports of US diplomats leaving Saudi Arabia and Aramco evacuating its Dhahran headquarters. It fell as mediators and officials met, then rose after Houthi claims of an attack on Saudi Arabia’s biggest refinery; Brent futures were up 1.2% in Wednesday morning trading, near $115.
2. Residents face uncertainty
The article describes oil prices as a real-time signal of Gulf sentiment, while residents must make harder-to-reverse decisions about schools and travel. Schools have been online in Riyadh this month, and regional sports tournaments have been cancelled and field trips postponed.
3. Forecasts and disruption
ING commodity strategists said the oil risk premium might begin to erode if the November 3 US midterms pass without renewed strikes on Iran. UBS raised its year-end Brent forecast to about $110 from $100, while the International Energy Agency’s Fatih Birol does not expect 2027 markets to return to prewar levels. Flight cancellations grounded 86% of scheduled flights at Riyadh airport between October 8 and 25.
