Oil Prices Rise Following Renewed US Strikes on Iran's Qeshm Island

The price of a barrel of Kuwaiti crude oil dropped by $16.04 to reach $98.72 per barrel in trading on the past Monday, compared to $114.76 in trading on the past Friday, according to the price announced by the Kuwait Petroleum Corporation.

In global markets, oil prices rose by more than a dollar this morning, after an Iranian official said that reaching an agreement to end the war remains distant. This comes as the United States launched an attack on Iran’s Qeshm Island, raising fears of an escalation in hostilities and risks to energy supplies.

The two benchmark crudes fell by more than 7 percent on Monday evening, after talks between Iranian and Qatari officials had sparked hopes of ending the US-Israeli war with Iran, but those hopes quickly dissipated.

A US official said on Monday that the United States had bombed Iran’s Qeshm Island. Some officials described the attacks as defensive, aimed at preventing Iran from attacking commercial ships in the Strait of Hormuz.

On Tuesday, a senior Iranian official told Reuters that the two countries are far from reaching an agreement to end the war, and that Tehran will not accept “excessive demands” put forward by Washington.

Tim Waterer, chief market analyst at KCM Trade, said, “This report has added a degree of risk premium back to the oil price. While markets had begun to price in a more diplomatic path, this reminder of ongoing military activity has reversed the tone.”

The war, which erupted in late February, is one of the main reasons for rising gasoline prices that are burdening voters, and US President Donald Trump is facing pressure to end the conflict as the midterm elections approach (today).

Priyanka Sachdeva, an analyst at Philip Nova, said, “At present, the risk of supply disruption still forms a floor for prices, while the uncertainty surrounding Washington’s next move, political developments, and traders’ reluctance to take bold positions are all limiting the upward trend.”

Brent crude for October settlement closed at its highest level in six months amid fears that the conflict in the Middle East could escalate again following the US midterm elections (today).

On Tuesday, the governor of Russia’s Yaroslavl region said that a Ukrainian drone attack had damaged an oil refinery in the city of the same name.

In addition, the United States will host two delegations from Ukraine and Russia in Abu Dhabi on November 10 and 11 to discuss ending Moscow’s war against Kyiv, post-war security agreements, and de-escalation efforts.

Chevron entered exclusive negotiations with Iraq last February to acquire the West Qurna-2 oil field, one of the world’s largest oil fields, which produces approximately 460,000 barrels per day. The field was previously operated by the Russian company Lukoil.

Saudi giant Aramco announced today that its profits rose by 34.6 percent in the third quarter of 2026 compared to the same period last year, as the war in the Middle East drove up crude oil prices while energy facilities in the Kingdom faced repeated attacks.

The state-majority-owned Aramco said in a statement that net income in the third quarter of 2026 reached 135.944 billion riyals ($36.25 billion), compared to 101 billion riyals ($26.9 billion) in the same period in 2025.

Saudi Aramco Chairman and Chief Executive Officer Amin Nasser said in a company statement: “Geopolitical uncertainty and attacks on key energy facilities continued to intensify the global energy supply crisis in the third quarter of 2026, with serious repercussions for global energy security.”

After excluding exceptional items, adjusted net income reached 116.9 billion riyals ($31.1 billion), the company announced.

Robert Mogielnicki, a researcher at the Gulf Research Center, told AFP: “Profit results are likely to look better compared to the same period last year, when oil prices were much lower, but they may be less positive compared to the previous quarter.”

In the second quarter of this year, Aramco announced that its net profit rose 44 percent year-on-year to 122.6 billion riyals ($32.7 billion).

The company’s CEO later noted during a conference call to discuss financial results that preliminary engineering work had begun on the planned expansion of the Kingdom’s vital East-West pipeline, which enables bypassing the Strait of Hormuz and transporting millions of barrels of crude oil daily from the Arabian Gulf to the Red Sea.

The expansion works are part of broader efforts to enhance the Kingdom’s oil export route network and increase the pipeline’s capacity, which has been targeted by several attacks during the current escalation with the Houthis, from 7 million to 10 million barrels per day.

The war in the Middle East, which began on February 28 with US and Israeli strikes on Iran, has disrupted global energy markets, led to significant drawdowns of strategic reserves, and contributed to rising inflation.

As speculation grows over potential new US strikes on Iran, Ukrainian drones have intensified attacks on Russia’s energy infrastructure, prompting Moscow to ban exports of certain products, particularly gasoline and diesel.

Nasser said his company was able to respond quickly to attacks on its infrastructure by deploying drones and specialized, trained teams to handle damage to facilities.

He added that “more than 90 percent of the materials used for operational recovery are sourced domestically,” noting that Aramco can carry out emergency repairs at a speed six times faster than industry standards.

French oil giant TotalEnergies said on Tuesday that it would purchase up to 1.6 million tons of liquefied natural gas (LNG) under a five-year agreement with ADNOC Gas of the United Arab Emirates.

Goldman Sachs raised its natural gas price forecasts for Europe in 2027, citing that conditions remain highly uncertain due to risks surrounding LNG supplies from the Middle East and winter weather conditions.

* The bank raised its forecast for natural gas prices at the Dutch TTF hub for the first quarter of 2027 to €74 per megawatt-hour from €44 previously, while raising its full-year 2027 forecast to €51 per megawatt-hour from €32 per megawatt-hour.

* The bank noted that although LNG supplies from the Middle East in October exceeded expectations, Gulf LNG exports averaged only 33 percent of pre-war levels.

Tanker movements remain volatile, and estimated flows of liquefied natural gas (LNG) through the Strait of Hormuz remain far below the recovery seen in oil flows.

* October was the worst month on record for attacks on commercial ships in the Strait of Hormuz and adjacent waterways, according to maritime security incident tracking data.

The International Energy Agency (IEA) said the critical state of the global natural gas market could persist into next year.

Following the winter, renewed demand for gas storage facilities is expected to drive up demand, likely coinciding with a market situation that remains precarious due to the fallout from the war in Iran.

The agency’s simulations indicate that EU gas storage levels could fall to 10% by the end of March next year.

However, this would apply only to the worst-case scenario, which could see further disruptions to LNG supplies through the Strait of Hormuz, alongside unusually cold weather.

The agency noted that the European natural gas market would become more volatile due to cold snaps as winter nears its end, potentially leading to greater price fluctuations by the end of the heating season.

Notably, the price of natural gas has more than tripled this year due to the US war with Iran, including the closure of the Strait of Hormuz.

European natural gas prices surged significantly on Tuesday following reports of renewed US attacks on targets in Iran.

Angela Wilkinson, Secretary General and CEO of the World Energy Council, emphasized that the world needs to secure current energy supplies while simultaneously investing in future sources and technologies. She stressed that demand management and improved consumption efficiency must precede the transition to new sources.

In an interview with CNN Business on Monday, Wilkinson said the challenge is no longer choosing between oil, gas, and renewables, but rather building a system capable of meeting rising demand while maintaining supply security.

She clarified that energy sector leaders must consider how to invest in the future energy system while maintaining the efficiency and reliability of the current system.

Venezuela’s crude oil exports fell in October to levels nearing their lowest since the US ousted former President Nicolas Maduro, amid rising global shipping costs and a seasonal drop in demand due to refinery maintenance.

According to data compiled by Bloomberg, Venezuelan oil shipments averaged around 809,000 barrels per day in October, a 25% monthly decline.

Sales of Venezuelan cargoes loaded in October stumbled after the state oil company resisted lowering prices to offset increased transportation costs and maintain the competitiveness of its crude against supplies from other producers, including Canada.

The rise in global shipping costs comes amid ongoing disruptions caused by wars in the Middle East and Ukraine, which have forced ships to take longer routes.