# Brent crude rises to $110 as Washington orders diplomats out of Saudi Arabia

Asian stock markets fell, and Southwest Airlines became the third major US carrier this month to cut its 2026 profit forecast because of fuel costs.

- Published: 2026-10-22T05:18:53.241Z
- Canonical: https://polylog.news/2026-10-22/brent-crude-rises-to-110-as-washington-orders-diplomats-out
- Publisher: Polylog (Global desk)
- Section: markets
- Sources: [The Hindu](https://www.thehindu.com/news/international/oil-climbs-as-us-orders-diplomats-to-leave-saudi-missions/article71609875.ece), [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001560400#utm_source=RSS), [CNBC Economy](https://www.cnbc.com/2026/10/21/southwest-airlines-luv-3q-2026-earnings.html), [OilPrice](https://oilprice.com/Energy/Energy-General/Big-Oil-Eyes-Record-Profits-but-Keeps-Spending-in-Check.html)

Brent crude futures [rose $1.29, or 1.2%, to $110.11 a barrel](https://www.thehindu.com/news/international/oil-climbs-as-us-orders-diplomats-to-leave-saudi-missions/article71609875.ece) early on Thursday. West Texas Intermediate (WTI) gained 97 cents to $98.12. The move followed a US order for some diplomats and their families to leave American missions in Saudi Arabia. Yemen's Houthis struck several Saudi targets on Wednesday. According to [Reuters reporting carried by AsiaOne](https://www.asiaone.com/money/oil-rises-us-orders-diplomats-leave-saudi-arabia-amid-escalating-tensions), the attacks killed at least one person at a civilian airport in Dammam and two people in a drone attack on a Saudi oil field. US officials also said the State Department plans to withdraw family members from other missions in the region.

Washington is acting on the supply side as well. The Department of Energy said it would lend up to nearly a third of the 1-million-barrel US emergency heating oil reserve. The aim is to contain prices that rose during diesel shortages linked to the wars in Iran and Ukraine. A reserve of that size can do little against a disruption across the Gulf, and the loan offer shows how tight middle-distillate supply has become.

Equities read the embassy orders as a risk signal. The Israeli business daily [Globes](https://www.globes.co.il/news/article.aspx?did=1001560400#utm_source=RSS) reported that optimism had "given way to fear." It said Asian exchanges fell sharply, the Chinese market entered bear territory, and New York futures turned lower on the evacuation reports. [Market data compiled by investingLive](https://investinglive.com/news/investinglive-asia-pacific-market-news-asian-stocks-slide-dollar-slips/) showed the Shanghai Composite down about 1%, extending a 10-week decline. Hong Kong's Hang Seng fell about 2.5%, Japan's Nikkei 225 fell about 1%, and South Korea's Kospi lost more. Gold did not benefit from the move into safety. It eased about 0.3% to [around $4,113 an ounce](https://www.150currency.com/).

Companies are already passing the costs along. Southwest Airlines [cut its 2026 profit forecast](https://www.cnbc.com/2026/10/21/southwest-airlines-luv-3q-2026-earnings.html) on Wednesday because of higher fuel prices. It is the third major US airline to do so this month. The oil majors are on the other side of the same trade. [OilPrice](https://oilprice.com/Energy/Energy-General/Big-Oil-Eyes-Record-Profits-but-Keeps-Spending-in-Check.html) reports that they are set to post another strong quarter but are keeping capital spending flat, while several governments where they operate plan windfall taxes.

Seen through a sound-money lens, the price of crude is doing what central-bank policy rates cannot. It is rationing a scarce physical good and moving income from fuel consumers to producers. Central banks in importing countries now face a supply shock that rate policy cannot fix. If they ease policy to soften the blow to growth, they risk turning a change in relative prices into a general rise in prices.

## What this means

Prices are moving through two channels: diesel and jet-fuel shortages, and a war-risk premium tied to whether Washington approves new strikes on Iran. Airlines, freight carriers and oil-importing Asian economies are exposed through margins and their currencies. Upstream producers and Gulf exporters with routes that avoid Hormuz gain. Diplomatic drawdowns and Houthi strikes on Saudi infrastructure were already partly priced. The new information is that Washington is now reducing staff in the main Gulf producer itself. Consensus treats Saudi supply as the backstop, which may be wrong if Houthi drones can reach Saudi oil fields. The 2019 Abqaiq attack is a precedent: it briefly removed about half of Saudi output, and prices fell back within weeks once repairs were visible. The likelier outcome is that Brent holds above $100 into early November, while US forces finish deploying and the midterm vote passes. A lasting Saudi-Houthi truce or an announced US-Iran negotiating channel would end that premium quickly. Another confirmed strike on a Saudi processing facility would push it higher.

## What to watch

- Whether more US airlines, truckers or chemical makers cut guidance in the coming weeks. That would show the fuel shock is spreading from transport into wider corporate earnings.
- Whether Houthi drones hit Saudi processing or export terminals, not just airports and field sites. Damage at that level would change actual supply, not only the risk premium.
- Whether gold keeps falling while oil rises. That would mean investors are reading the shock as a reason for higher interest rates rather than a reason to hold metals.