Brent Hits $112.29 After Houthi Drone Strike at Shaybah as 1 Million Bpd Field and 7 Million Bpd Bypass Pipeline Face Risk

Brent crude futures traded at $110.63 per barrel at 07:36 UAE time on Thursday on ICE, up $1.81 or 1.7% from Wednesday's settlement of $108.82, according to The National and FinanceFeeds. WTI gained 1.4% to $98.52 per barrel in the same report. Trading Economics later listed Brent at $112.29 per barrel, up $3.47 on the day. The rally followed a Houthi drone strike near Saudi Aramco's Shaybah oilfield.

What Happened at Shaybah

Saudi air defences intercepted a drone aimed at Shaybah, and debris fell near a processing plant. Two people died and two were injured, The National reported. The Saudi Energy Ministry said the debris started a fire in a contractor's vehicle and that operations were unaffected. Shaybah produces one million barrels of crude a day, per The National.

Hours later, an attack on King Fahd International Airport in Dammam killed one person and injured eight. The Houthis have not commented on that attack. The US State Department ordered non-emergency government employees and their families to leave Saudi Arabia, and it called reports of a Gulf-wide order inaccurate.

What the Strikes Put at Risk, in Dollars

At the $110.63 Brent quote, Shaybah's one million barrels a day carries $110.6 million of crude value every day. The East-West pipeline moves 7 million barrels a day to Red Sea terminals and bypasses the Strait of Hormuz. At the same price, that throughput is worth $774 million a day.

That pipeline is the harder number to pin down. The National reported that flows were halted on October 5 after a Houthi strike on a pumping station east of Riyadh. Oilprice.com wrote that Saudi Arabia had largely restored exports via Hormuz and the Red Sea, and FinanceFeeds said current pipeline status is unconfirmed.

The disagreement between those accounts matters for pricing. If the line runs at full rate, a strike on one pumping station is a repair problem. If it is already constrained, the next hit removes barrels the market has no substitute for.

What Changed Since Our Last Gulf Supply Read

Our earlier analysis of Gulf crude flows at 8.5 million bpd put stranded value at $1.27 billion a day with Brent at $110 and EIA assuming 4.5 million bpd shut in. That work centered on Hormuz transit. This week's strikes target inland fields, airports and pumping stations, which are the assets built to route around the strait.

Brent settled at $109.55 in the session covered by our contract expiry report. Thursday's $112.29 quote sits $2.74 above that level. Trading Economics lists the four-year high at $114.44, set on May 4.

Where Forecasters Draw the Lines

FinanceFeeds laid out reference levels rather than forecasts. A bear case of $105 needs no further Saudi strikes and an easing of the diesel premium. A base range of $108 to $112 assumes attacks continue without hitting output. A bull case of $113 requires a strike that takes Saudi barrels or the East-West pipeline offline.

Trading Economics sets its model target for the fourth quarter at $113.86 per barrel and its 12-month estimate at $130.36. The model's fourth-quarter target sits $8.86 above the $105 bear case, and neither source comes from a bank desk. Treat both as scenario markers until Goldman Sachs, Morgan Stanley or Wood Mackenzie publish revisions.

Canadian producers sell in US dollars, so every dollar Brent adds feeds through to CAD revenue only as far as the exchange rate holds. Heavy crude differentials for WCS are a separate question that this week's data does not address.