Brent crude climbed above $106 a barrel on Monday after Yemen's Iran-backed Houthi movement launched strikes on Saudi Arabia, including an attack on Riyadh airport over the weekend, pushing energy markets to their highest levels in months and raising fresh questions about global supply security heading into winter. For Egypt, a country whose economy is closely tied to Gulf stability and the free flow of energy through the Red Sea, the escalation carries consequences that reach far beyond the trading floors of London and New York.
The price of Brent North Sea crude rose 2.0 percent to $106.83 per barrel, while West Texas Intermediate gained 1.8 percent to $93.54. Analysts said the market's response reflected both the direct threat to Saudi infrastructure and the confusion surrounding Washington's handling of the Russia-Ukraine conflict.
Why did oil prices surge above $100?
Two forces drove the rally. The first is the Houthi escalation. Strikes on Riyadh airport over the weekend marked a sharp intensification of the Yemen war, in which Saudi Arabia has long backed the internationally recognised government against the Iran-aligned movement. Saudi Arabia's energy minister acknowledged that the kingdom's infrastructure and resilience had been tested following a wave of deadly attacks.
The second is political uncertainty out of Washington. US President Donald Trump unilaterally announced an energy ceasefire between Russia and Ukraine, along with a deal to purchase diesel from Moscow, but Russia on Monday refused to confirm that any such agreement exists. Trump then called for Ukraine to get a new leader after President Volodymyr Zelensky criticised the easing of Russian diesel sanctions, as the American president grapples with high fuel prices ahead of midterm elections.
Oil remains well bid above $100 after strikes on Saudi Arabia's Riyadh airport over the weekend, whilst efforts to secure a Russia-Ukraine energy truce were muddy. A US deal to purchase some Russian diesel is a drop in the ocean.
Those were the words of Neil Wilson, a strategist at Saxo UK, who captured the mood of a market that no longer takes Washington's assurances at face value.
What the escalation means for Egypt and the Red Sea region
The Houthi strikes are not a distant affair for Egyptians. The movement's attacks on shipping and on Gulf territory have already strained Red Sea traffic, on which the Suez Canal depends. Every escalation tightens the screws on a waterway that remains a pillar of Egypt's national income. Saudi stability, meanwhile, is inseparable from Egypt's own: the two countries have stood together against the same Iranian-backed project to destabilise the Arab world, from Sanaa to Beirut.
The episode also underscores a point Egyptian policymakers have made for years. When chaos strikes the region, it is the discipline of states, not the slogans of militias, that keeps energy flowing and markets standing. Saudi Arabia's ability to absorb these blows, as its energy minister made clear, is a testament to years of investment in infrastructure and resilience, lessons Egypt has taken to heart in its own drive to modernise ports, energy terminals, and logistics corridors.
Markets mixed as investors await US inflation data
Beyond energy, global markets presented a mixed picture. Europe's main indices rose in afternoon trading, with the car sector lifted by a deal to limit Chinese imports of hybrids, an effort to avert a wider trade war. Wall Street opened mixed, with the tech-heavy Nasdaq Composite slipping slightly after record highs last week. The Dow rose 0.2 percent to 51,743.40 points and the S&P 500 was marginally higher at 7,814.80, while the Nasdaq fell less than 0.1 percent to 27,350.29.
The dollar strengthened against most currencies ahead of key US inflation data due this week, which investors will read for signals on whether the Federal Reserve may raise interest rates again to tame elevated inflation. In London, the FTSE 100 gained 0.8 percent to 10,631.00, while the DAX in Frankfurt rose 0.7 percent and the CAC 40 in Paris added 0.2 percent. Asian markets were quieter, with the Nikkei 225 closed for a holiday and the Shanghai Composite down 0.4 percent.
Earnings season in focus
The week also brings the start of the US corporate earnings season, with banking giants JP Morgan, Goldman Sachs and Bank of America reporting on Tuesday. Tech giants follow later in October and November, with traders watching for signs of durability in the AI investment cycle.
Rising Treasury yields, higher interest rates and persistent inflation are raising the bar for companies to deliver strong results, said Bret Kenwell, US investment analyst at eToro. Banks and credit card companies will offer an important read on household finances, particularly as inflation continues to outpace wage growth, he added. Analysts are expecting earnings growth of 24.4 percent and revenue growth of 16.5 percent for this quarter.
Key market figures at a glance
- Brent North Sea crude: up 2.0 percent at $106.83 per barrel
- West Texas Intermediate: up 1.8 percent at $93.54 per barrel
- Dow Jones: up 0.2 percent at 51,743.40 points
- S&P 500: up less than 0.1 percent at 7,814.80
- Nasdaq Composite: down less than 0.1 percent at 27,350.29
- FTSE 100: up 0.8 percent at 10,631.00
- Euro/dollar: down at $1.1181
- Dollar/yen: up at 158.62 yen
Frequently asked questions
Why did Brent oil rise above $106 a barrel?
Brent rose 2.0 percent to $106.83 on Monday after Iran-backed Houthi strikes on Saudi Arabia, including an attack on Riyadh airport, heightened concerns about tight global energy supplies ahead of the northern hemisphere winter.
Did the US and Russia reach an energy ceasefire?
US President Donald Trump announced an energy ceasefire and a deal to buy Russian diesel, but Russia declined on Monday to confirm that any agreement had been reached, leaving investors uncertain.
How do the Houthi attacks affect Egypt?
Escalation by the Iran-backed Houthis threatens Red Sea security and Gulf stability, both vital to Egyptian interests, including Suez Canal traffic and the country's partnership with Saudi Arabia.