Oil Climbs as Middle East Tensions Disrupt Supply Recovery Hopes
By Martin Lam
Last Updated: October 7, 2026
Oil Movement Overview
On October 7, 2026, oil prices experienced an uptick, with West Texas Intermediate (WTI) crude futures rising by 0.59% to $89.97 per barrel. This increase followed a previous day where Brent oil futures settled at $101.08 per barrel, up by 0.8%. The rise in prices was attributed to escalating tensions in the Strait of Hormuz, which raised concerns about potential disruptions in oil supply, alongside reports indicating a decrease in US oil inventories.
Key Driver Behind The Move
The primary catalyst for the price increase was the reported rise in attacks on vessels in the Strait of Hormuz, a critical shipping route for oil. The UK Maritime Trade Operations noted that there had been seven strikes on vessels in the area since late September, with the latest occurring just days prior. This situation has heightened fears of supply disruptions, particularly as Gulf producers were beginning to restore shipments to prewar levels.
Market Data And Reaction
According to the American Petroleum Institute, US oil inventories fell by 2.09 million barrels for the week ending October 2, 2026. This decline follows three weeks of significant inventory builds and comes as producers prepare for potential weather-related disruptions in the Gulf of Mexico. The official US inventory data, expected later that day, is anticipated to reflect similar trends as indicated by the API data.
Broader Market Implications
The conflict in the region has expanded beyond the Strait of Hormuz. Reports indicated that the Saudi-backed Yemeni government had regained control of several strategic locations along the Red Sea from the Iran-backed Houthis. This development could potentially enhance crude oil flows through the Bab el-Mandeb strait. In retaliation, the Houthis targeted Saudi infrastructure, including an Aramco refinery in Riyadh. Despite these disruptions, the anticipated improvement in Middle East supply and planned emergency releases by the Group of Seven (G7) have somewhat tempered the extent of oil price increases.
What Oil Traders Should Watch
- Official US crude inventory data, expected later on the same day.
- Any further attacks on shipping in the Strait of Hormuz or on Saudi infrastructure.
- Developments in the Yemen conflict and their impact on Bab el-Mandeb oil flows.
- The scale and timing of the G7's planned emergency supply releases.