Oil stabilised as rising Gulf flows offset Houthi strikes and US storm threat

Global crude oil futures settled little changed on Tuesday after recovering earlier losses, as swelling Middle East exports and G7 reserve pledges balanced escalating Houthi strikes and US storm risks.

Crude rebounded from intraday lows as heavy export volumes checked early buying. Vitol confirmed that 12 million bpd of crude and 2 million bpd of refined products departed the Middle East over the past ten days, while Saudi Arabia pumped 5.8 million barrels to Yanbu via its East-West Pipeline. Downside was further cushioned by market confusion surrounding the G7’s 100-million-barrel emergency reserve release, with the IEA deferring allocation details until next week.

However, losses met immediate resistance from escalating regional hostilities. Houthi drone and missile strikes hit Saudi airports in Jazan and Najran on Monday evening, injuring three people amid an intensified government offensive. Across the Atlantic, the US National Hurricane Center flagged a 100% chance of cyclone formation in the Gulf of Mexico within seven days, threatening offshore output alongside warnings from Ukraine of an imminent Russian offensive.

Longer-term pricing remains anchored by a tightening global balance sheet. The EIA lowered its 2026 world output forecast to 101.1 million bpd against 102.4 million bpd of demand, projecting a 1.3-million-bpd structural deficit before supply recovers in 2027. Near-term upside was capped by US inventory expectations, with analysts forecasting a 1.7-million-barrel crude build that kept the transatlantic Brent–WTI spread wide at $11.14 a barrel.