Oil Prices Surge 2% Amid Saudi Attacks and OPEC Demand Cuts
Oil prices rose sharply on Monday following attacks in Saudi Arabia and revised demand forecasts from OPEC.
Crude oil prices increased by over 2% due to renewed geopolitical tensions in the Middle East.
OPEC has lowered its global oil demand growth forecast for 2026 to just 400,000 barrels per day.
Goldman Sachs predicts Brent crude prices could reach $90 per barrel by December.
Oil prices experienced a notable rise on Monday, climbing to their highest levels in nearly two weeks. The increase was driven by fresh attacks on Saudi Arabia and oil tankers in the Strait of Hormuz, which reignited concerns over supply disruptions in the Middle East. West Texas Intermediate (WTI) crude was priced at $93.78 per barrel, reflecting a $1.93 increase, while Brent crude rose to $106.80 per barrel, up by $2.09.
The surge in oil prices follows a weekend marked by violence, including a Houthi attack on Riyadh's international airport that resulted in 13 fatalities and over 300 injuries. Additional assaults were reported on Sunday, targeting two oil tankers near Oman and in the Strait of Hormuz. These incidents threaten to hinder the recovery of Gulf oil exports, which had recently reached 81% of pre-war levels in September, with crude shipments recovering to 91%.
Goldman Sachs has adjusted its December forecast for Brent crude, raising it from $85 to $90 per barrel, attributing this increase to geopolitical risks that are currently adding over $20 per barrel to oil prices. Meanwhile, OPEC has revised its expectations for global oil demand growth, now projecting an increase of only 400,000 barrels per day in 2026, significantly lower than the 1.4 million barrels per day forecasted earlier this year.
The International Energy Agency has also indicated a potential decline in global oil consumption, predicting a drop of 2.5 million barrels per day in 2026, followed by a rebound of 2.6 million barrels per day in 2027. This shift in demand dynamics could have significant implications for the oil market and global energy prices.
Looking ahead, the market will be closely monitoring the impact of additional Russian diesel supplies, which could exert downward pressure on fuel prices. President Trump announced that Russia would provide over 300,000 metric tons of diesel to U.S. and global markets, with further supplies expected. Additionally, the restoration of offshore production in the Gulf of Mexico by major companies like Shell, Chevron, and BP is anticipated as operations resume following Hurricane Isaias.
