Oil slips to $114 as traders weigh Saudi supply risks

October 26, 2026 (MLN): U.S. crude oil prices fell more than 2% on Monday as investors assessed the risk of further attacks on Saudi Arabia’s energy infrastructure against concerns that persistently high prices could weaken global oil demand.

Currently, Brent crude futures is down, 1.89%, at $114.51 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is up by $2.33, or 2.26%, to $100.94 per barrel by [11:30 am] PST.

The decline followed a strong rally on Friday, when attacks by Yemen’s Houthi militants on Saudi Arabia revived concerns over potential disruptions to global energy supplies.

Regional tensions persisted over the weekend, with the Houthis claiming to have targeted Riyadh’s main airport and oil facilities on Saturday. Saudi authorities said on Sunday that they had intercepted additional missiles and drones, according to CNBC.

Saudi Arabia partially resumed operations at its main airport on Sunday despite damage caused by earlier attacks, while the Houthis warned of further strikes.

The continued hostilities have raised concerns about the security of Saudi Arabia’s energy infrastructure, with market participants increasingly assessing the potential impact of a major disruption to oil production, refining or exports.

Michael Alfaro, chief investment officer at Gallo Partners, told CNBC that geopolitical uncertainty had already added approximately $20 per barrel to oil prices.

He warned that a significant attack on Saudi Arabia’s East-West pipeline or further damage to refining facilities could trigger another sharp increase in prices. However, sustained gains could eventually reduce consumption.

“If oil pushed above $120, $130 or $140 per barrel for Brent, you’re going to see more demand destruction,” Alfaro said.

He also highlighted refining capacity as a key concern, noting that damage to processing facilities could create longer-lasting challenges for global energy markets, potentially extending into 2027 and beyond.

Meanwhile, Saudi Arabia plans to begin storing crude oil in Singapore in the second half of 2027, according to energy ministers from both countries. The initiative aims to strengthen the resilience of Saudi Arabia’s supply chain to Asian markets.

In the United States, the Energy Department on Friday authorized the release of up to 400,000 barrels of oil from the Strategic Petroleum Reserve to address a supply disruption at a refinery in Louisiana.

However, additional production from U.S. oil companies remains uncertain as producers remain cautious about committing to major investments amid volatile prices and geopolitical uncertainty.

Alfaro said U.S. producers were adding some drilling rigs but had yet to make substantial capital expenditure commitments to expand drilling activity or bring significant new production online.

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