Brent Crude Hits Five-Month High: What Saudi Attacks Mean for Your Money

Brent crude futures have surged towards $120 per barrel, reaching highs between $115 and $117 in late October 2026. This sharp increase follows a series of Houthi attacks on Saudi oil facilities and tanker incidents in the critical Strait of Hormuz (Nv, Comexlive). For you, this means potentially higher costs for everything from fuel to imported goods, impacting household budgets and business profitability across the Middle East.

What's pushing oil prices higher?

The recent rally in oil prices is largely due to escalating geopolitical tensions in the Middle East, which are sparking fears of global supply disruptions (OilPrice.com). Yemen's Iran-aligned Houthi group claimed numerous attacks throughout October 2026 on Saudi Arabian oil infrastructure and airports.

Targets reportedly hit included the Ras Tanura oil refinery, Saudi Arabia's largest with a capacity of 550,000 barrels per day, and an Aramco facility in Abqaiq (Nv). The Shaybah oil field also saw a drone interception, which tragically resulted in two fatalities (Nv). These incidents directly threaten Saudi Arabia's ability to maintain its crude output, which was 9.5 million barrels per day in 2023 (The National).

Adding to the anxiety, a tanker transiting the Strait of Hormuz was struck by an unidentified projectile or explosive device on October 29, 2026, causing a fire and temporarily disabling the vessel (Nv). Iran's Islamic Revolutionary Guard Corps (IRGC) claimed multiple tankers were hit by naval mines in the Strait, though the U.S. Central Command disputed these assertions (Nv). This waterway is a vital chokepoint, through which roughly a fifth of the world's oil and liquefied natural gas flowed before the Iran war (OilPrice.com). Any disruption here sends immediate ripples through global energy markets.

How does this affect Saudi Arabia's finances?

High oil prices are a double-edged sword for Saudi Arabia. The Kingdom's economy remains heavily reliant on oil revenues, which typically make up around 60% of government income and 40% of its Gross Domestic Product (GDP) (OilPrice.com). When prices are high, like in 2022 when Brent averaged over $100 a barrel, Saudi Arabia achieved its first budget surplus in nearly a decade, with oil revenues hitting $326 billion (The National).

For 2026, Saudi Arabia's fiscal breakeven oil price – the price needed to balance its budget – is estimated between $80 and $85 per barrel by some analysts, with other estimates going as high as $113 when domestic spending is included (The National). Current prices well above these figures mean the government has more financial flexibility. This can lead to increased spending on ambitious development projects under Vision 2030, such as NEOM, and support for salaries and social programmes.

However, this reliance also means vulnerability. If global oil demand weakens or geopolitical tensions ease unexpectedly, a price decline could force the government to cut back on spending, potentially delaying major projects or increasing borrowing (The National). Fortunately, Saudi Arabia possesses substantial financial buffers, including foreign exchange reserves of $430-$440 billion held by the Saudi Arabian Monetary Authority (SAMA) and the Public Investment Fund (PIF) with over $930 billion in assets (OilPrice.com). These provide a cushion against market volatility.

What this means for your money and the wider region

The ripple effects of almost $120 oil prices extend far beyond government coffers. For businesses and households, higher energy costs translate directly into inflationary pressures. You might see increased prices for goods and services as businesses pass on higher fuel and transportation costs. This is particularly true for countries with large trade deficits that rely on energy imports (Dailyrecordnews). The Executive Director of the International Energy Agency (IEA), Fatih Birol, noted in October 2026 that nearly $120 oil prices have a major impact on trade deficits for many countries and on household budgets worldwide (Dailyrecordnews).

For investors, the prospect of continued supply disruptions solidifies expectations of elevated oil prices. Goldman Sachs has even suggested Brent could reach $120 a barrel if hostilities against vessels in the Middle East intensify (OilPrice.com). However, this environment also brings increased risk, especially for contractors in Saudi Arabia who might face greater cash-flow challenges compared to earlier cycles (OilPrice.com). Regional stability is also a concern, with ExxonMobil and Chevron cancelling executive trips to a major oil exhibition in the UAE due to the deteriorating security situation (Gulfnews). The Secretary General of the Gulf Cooperation Council (GCC), Jasem Mohamed Albudaiwi, condemned the Houthi attacks, highlighting their persistence in targeting civilians and vital facilities (Gulfnews).

What to watch next

Several key events and indicators will shape the oil market in the coming weeks:

• OPEC+ Meeting: The next scheduled OPEC+ meeting is on Sunday, November 1, 2026 (Tradersunion). Decisions from this group, which controls a significant portion of global supply, are crucial for price stability.
• Oil Market Reports: Keep an eye on the OPEC Monthly Oil Market Report, due Wednesday, November 11, 2026, and the IEA Oil Market Report, scheduled for Friday, November 13, 2026 (Tradersunion). These provide critical data and forecasts.
• Diplomacy and Conflict: The stalled diplomatic efforts to ease regional tensions and any further attacks or disruptions will directly influence prices. Analysts widely anticipate a continued escalation of the conflict in the short term, keeping oil prices elevated (OilPrice.com).
• Saudi Aramco's Plans: Saudi Aramco halted plans in January 2024 to expand crude oil production capacity to 13 million barrels per day by 2027 (The National). Any shift in this stance could signal a change in future supply.

The bottom line

The recent surge in Brent crude prices, driven by escalating attacks and Strait of Hormuz incidents, means higher energy costs for businesses and households across the Middle East. While this offers a fiscal boost for oil-rich nations like Saudi Arabia, it also highlights the region's vulnerability to geopolitical instability and the inflationary pressures it creates for everyone.

This article is for information only and is not financial advice.