Oil Nears $120 as Middle East Conflict Rattles Energy Markets

The situation intensified after Saudi Aramco evacuated its Dhahran headquarters following Houthi drone strikes, an unprecedented escalation that also claimed two lives at the Shaybah oilfield. As global benchmarks climb, the US Energy Department is moving to release 315,000 barrels of diesel from Northeast reserves to mitigate regional shortages. This supply pressure coincides with the first shipment of Russian diesel bound for New York, expected on November 7 under a new agreement between Washington and Moscow.

Energy volatility extends beyond crude. European gas benchmarks hit four-year highs above €93/MWh, fueled by colder weather and restricted Qatari LNG shipments. Meanwhile, production disruptions in Libya—where protesters shut down critical pipeline valves—and potential export halts from Indonesia threaten to further tighten global energy balances. While the US maintains a domestic gas glut, record-high global demand and geopolitical instability continue to overshadow isolated regional surpluses, leaving markets increasingly vulnerable to further supply shocks.