Saudi Arabia used the oil industry's biggest gathering this week to send one message: the barrels will keep moving. The setting made that a hard sell. The WPC Energy Congress is being held roughly 10 km from King Khalid International Airport, and Houthi drones and missiles have struck that airport four times in a week, Reuters reported.
Brent crude traded at $105.97 a barrel on Tuesday, down 0.6% on the day, while WTI held roughly flat at $93.76. Brent is still nearly $8 higher than a week ago, when it sat near $98. Part of Tuesday's softness came from the Russian diesel deal, which traders read as a small easing of the fuel squeeze.
Four strikes in a week
Saudi authorities say Saturday's missile strike left 12 people dead and 309 hurt. Late on Sunday, a second projectile landed at the airport and one more person died. Reuters and The National both described Saturday's strike as the kingdom's deadliest in over ten years.
Flights were still grounded on Monday, and the civil aviation authority would not say when the airport might reopen. Two regional officials told the Associated Press that early findings point to a layered assault: a wave of drones went in first to open a gap for the cruise and ballistic missiles behind them.
The conference went ahead anyway, but some big names stayed home. Bosses from ExxonMobil, Chevron, Shell, BP and TotalEnergies no longer appeared on the program organizers put out Monday morning. BP said travel problems kept its team away.
A pledge and a pipeline plan
At a meeting of the International Energy Forum on Sunday, Energy Minister Prince Abdulaziz bin Salman promised buyers in Saudi Arabia and overseas that supplies would continue "regardless of circumstances." At the official opening of the congress a day later, he called Riyadh "the capital of energy security" and pointed to the crowd in front of him as proof. He was careful not to overstate it: "Our gathering today does not mean that risks have disappeared."
He then sketched how the kingdom wants to move more crude without leaning on Gulf shipping lanes:
- Today: Flows on the East-West line to the Red Sea stood near 5.8 million barrels daily on October 6. The pipe can handle around 7 million.
- In about two months: Converting a gas line to oil could add about 1.2 million barrels of crude daily, and the switch would take seven or eight weeks, he said, according to Bloomberg. The line would revert to gas by May, ahead of summer demand at home.
- In two to three years: Upgraded pump stations and other projects could raise capacity on routes that skip the Gulf to 10 million barrels daily. "We may end up with 10 million barrels within the next two to three years," he said.
Houthis name oil sites as targets
The Houthis raised the stakes on Monday. Mohammed al-Bukhaiti, who sits on the group's political bureau, told AFP that staff at the kingdom's airports and oil plants should keep their distance, calling those sites "legitimate targets." If the US gets involved, he said, it can expect a "swift and painful response."
Trump, speaking the same day, said the Houthis were "misbehaving very badly." He has also said the US is looking at taking part in the Saudi strikes. That comes on top of reports that the White House is weighing new options against Iran. The Saudi-led coalition in Yemen said Tuesday it would soon tell civilians to clear out of a location in Sanaa, the Houthi-held capital, before what it called a "special operation."
Prince Abdulaziz has promised a firm answer to the attacks. "The events of recent weeks are serious," he said, adding that the kingdom's response "must be equally serious."
OPEC cuts its demand view again
Demand is the other half of the picture. OPEC Secretary General Haitham Al Ghais told the congress the group now expects world oil use to rise by just 400,000 barrels a day in 2026. In January, OPEC was counting on growth of 1.4 million. He thinks much of the lost demand has only been delayed and sees growth of 1.7 million barrels a day in 2027, still below the 2.4 million OPEC had penciled in as recently as September.
For traders, the near-term question is simpler. Can Saudi Arabia keep its Red Sea exports flowing while its capital is under fire? Brent's modest dip on Tuesday suggests the market is, for now, taking the minister at his word.