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Oil rises as US orders diplomats to leave Saudi Arabia amid escalating tensions - Finance news and analysis from Global Banking & Finance Review
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Oil rises as US orders diplomats to leave Saudi Arabia amid escalating tensions

Published by Global Banking & Finance Review

Posted on October 22, 2026

3 min read

· Last updated: October 22, 2026

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Oil Prices Jump as US Pulls Diplomats from Saudi Arabia Amid Rising Tensions

By Arathy Somasekhar

Market Reactions and Geopolitical Developments

Oil Price Movements

Oct 22 (Reuters) - Oil prices rose on Thursday as more attacks by the Houthis in Saudi Arabia prompted the United States to order some diplomats and family members to leave its missions in the Kingdom.

Brent crude futures rose $1.29, or 1.2%, to $110.11 a barrel at 00:34 GMT, while US West Texas Intermediate crude gained 97 cents, or 1%, to $98.12. Brent had settled largely unchanged on Wednesday, while WTI had eased 67 cents. 

US Diplomatic Actions

The US State Department plans to withdraw family members from a number of other US missions in the region, US officials told Reuters. 

Escalating Attacks and Regional Tensions

Houthi Strikes in Saudi Arabia

Yemen's Iran-aligned Houthis struck several targets on Wednesday with at least one person killed and eight more wounded at a civilian airport in Dammam, and two people killed in a drone attack on a Saudi oil field.

Explosions in Iran

Explosions were also heard in Sirik in southern Iran, Iranian media reported on Wednesday, saying the nature and origin of the explosions were unknown.

Iran's Response

On Wednesday, Iran's Foreign Minister Abbas Araqchi told the Financial Times that Iran was fully prepared to defend itself and President Masoud Pezeshkian told state media the US could not expect dialogue while blockading and threatening Iran.

Impact on Shipping and Oil Supply

Attacks on Shipping

There were at least 18 attacks on shipping over the past two weeks, Kpler data showed, while LSEG analysts warned that Iran was targeting tankers well beyond the Strait of Hormuz, reaching into the Gulf of Oman and jeopardising Gulf crude loadings and ship-to-ship transfers supporting regional loadings.

International Diplomacy and Conflict

US-Russia-Ukraine Talks

Meanwhile, Russian President Vladimir Putin hosted US Special Envoy Steve Witkoff in St Petersburg on Wednesday for talks on ending the war in Ukraine amid Washington's latest push to stop Europe's bloodiest conflict since World War Two.

The Kremlin said Putin had agreed to resume US-mediated peace talks with Ukraine as soon as next month. Ukrainian President Volodymyr Zelenskiy said he supported the talks and hoped they would start as soon as possible.

US Oil Stockpiles and Energy Policy

Crude and Distillate Stock Changes

US crude stocks fell by 3.06 million barrels to 412.5 million barrels last week, the US Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for an 820,000-barrel draw.

Distillate stockpiles, which include diesel and heating oil, rose 1.68 million barrels in the week to 104.3 million barrels, versus expectations for a 1.16 million-barrel drop, EIA data showed.

US Emergency Heating Oil Reserve

Government Response to Price Surges

The Trump administration is offering to loan up to nearly a third of the 1-million-barrel US emergency heating oil reserve, the Department of Energy said on Wednesday, seeking to contain prices that have surged on diesel shortages due to the wars in Iran and Ukraine.

(Reporting by Arathy Somasekhar; Editing by Kate Mayberry)

Key Takeaways

  • Brent crude jumped $1.29 to $110.11/bbl and WTI rose $0.97 to $98.12 after escalating Houthi unrest prompted the US to order departures from Saudi missions (apnews.com).
  • The US State Department ordered non‑emergency staff and their families to leave Saudi Arabia, citing repeated Houthi drone strikes on airports and oil infrastructure, including fatal debris at an Aramco field (apnews.com).
  • US crude inventories fell roughly 3.06–3.1 million barrels in the week to Oct 16—far exceeding expectations—and distillate stocks rose, underscoring supply tightness (marketscreener.com).

References

Frequently Asked Questions

Why did oil prices rise on Thursday?
Oil prices increased due to heightened tensions in Saudi Arabia, following attacks by the Houthis and the US evacuation of diplomats.
Which US government action contributed to oil price changes?
The US ordered some diplomats and families to leave Saudi Arabia after Houthi attacks, contributing to increased oil prices.
What impact have Houthi attacks had on oil infrastructure?
Attacks targeted Saudi oil fields and a civilian airport, causing fatalities and raising concerns on regional oil supply security.
How have US oil stockpile levels changed recently?
US crude stocks fell by 3.06 million barrels, while distillate stockpiles rose by 1.68 million barrels last week.
What steps has the US taken to address rising energy prices?
The US is offering loans from its emergency heating oil reserve to help contain rising prices amid diesel shortages.

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