Houthi Attacks Threaten Saudi Oil Supply as Brent Hits 108 Dollars

Saudi Arabia faces growing oil supply risks as Houthi attacks extend from energy infrastructure to the Shaybah oilfield, raising concerns about potential production shutdowns. The escalation is adding pressure to global energy markets, with Brent crude reaching $108 per barrel and trading at a $5 premium over US West Texas Intermediate, according to OilPrice.com on October 20, 2026.

The widening crude price differential coincides with mounting concerns over shipping security and fuel availability across the Middle East. Attacks on energy facilities and maritime transport are also driving up liquefied natural gas prices, increasing pressure on import-dependent economies in Europe and Asia.

Asian LNG prices climbed to their highest levels since December 2022, with the Japan Korea Marker benchmark exceeding $30 per million British thermal units. Repeated attacks on tankers across the Middle East, combined with a worsening European winter outlook, have contributed to the increase, according to OilPrice.com.

The United Kingdom Maritime Trade Operations reported an attack on a loaded vessel attempting to pass through the Strait of Bab el-Mandeb, marking the first reported Houthi attack on LNG shipping described in the source. The Qatari-owned al Kharsaah was identified as the only LNG carrier known to have been near Yemen's coast over the weekend, making an uncommon Red Sea voyage to deliver Qatari gas to Poland.

European gas prices are adding to the pressure on global LNG markets. European Union gas storage inventories remain below 75% of capacity, while inventory growth has effectively stalled. Europe's LNG imports averaged 175,000 tonnes over the preceding 30 days, 9.5% above the five-year seasonal average.

China and Japan, meanwhile, have reduced LNG purchases by 8% to 10% year over year as they seek to maximize nuclear and renewable energy generation, according to the report.

QatarEnergy has withdrawn an offer to sell up to 10 older steam turbine LNG carriers as it seeks to increase vessel transits through the Strait of Hormuz. The company is wary of deploying newer ships on the hazardous route, the report said.

Elsewhere in the energy sector, Chevron signed an agreement with the Egyptian government establishing financial and commercial terms for Cyprus' Aphrodite gas field. The offshore project is expected to connect to Egypt's grid under a 15-year supply agreement.

Norway's Equinor also reported a natural gas and condensate discovery at the Lakris prospect in the Norwegian Sea. The discovery contains an estimated 3 million to 4 million barrels of oil equivalent and opens up the PL 1002 license block, according to the report.

In Libya, Eni is preparing to launch its Bouri gas utilization project, which is expected to increase recovery from the offshore Bouri field by 0.7 billion cubic meters annually. All additional gas production is intended for the domestic market.

Meanwhile, negotiations between Saudi Aramco and Asian refiners over 2027 term contracts have stalled. The dispute centers on whether spot purchases made during the US-Iran war should count toward 2026 contractual obligations, with some buyers resisting additional volumes for 2027.

China's refinery activity has remained resilient despite weaker crude imports. September crude processing rose 0.6% from August to 14 million barrels per day, supported by strong refined-product exports and offsetting weak domestic demand. The report also indicated a 21% year-over-year decline in crude imports and a reduction in implied inventories of 530,000 barrels per day.

The International Energy Agency is also considering further coordinated emergency oil stock releases. Executive Director Fatih Birol said members could coordinate additional releases, while emphasizing the immediate priority of releasing 20 million barrels of diesel. The report indicated that a return to normal energy market conditions in 2027 remains unlikely.