If the US Strikes Iran Again — Oil and Fuel Price Scenarios for the Gulf

Where do things stand at the end of October?

Oil markets ended October pricing a higher risk of renewed conflict. December Brent settled at $114.88 a barrel on 29 October, after reports that President Donald Trump had signalled possible strikes on Iran after the 3 November midterm elections, alongside continuing diplomatic contacts ^[1]. Brent had closed at $100.20 on 7 October and rose to $116.72 on 23 October, its highest close since late April ^[2].

Talks have not stopped. Qatari mediators returned to Tehran on 30 October, and Iran is expected to reply to a revised US proposal ^[3]. Both an agreement and a new round of fighting are therefore possible within weeks. This article looks at the second path: what the record and the published research say about prices if strikes resumed and Iran or its allies targeted energy infrastructure in Gulf Arab states.

What does history say about attacks on Gulf oil facilities?

The clearest precedent is September 2019. Drones and missiles hit Saudi Aramco's Abqaiq processing plant and the Khurais field, disrupting 5.7 million barrels a day (mb/d), more than half of Saudi output and about 5% of world supply ^[4]. Brent closed at $69.02 on 16 September, up about 14% in a day, the biggest one-day rise in a decade, but within two weeks it was only $1.58 above its pre-attack level because Aramco restored output quickly ^[4].

Not every attack moves the market much. When Houthi drones hit fuel tankers near an ADNOC storage site in Abu Dhabi in January 2022, Brent rose 1.6% to $87.89 because no supply was lost ^[5]. The 2026 war is different in scale: Brent futures were more than 36% higher by 13 March than on 28 February, after peaking at $119.50 on 9 March ^[6].

The lesson from these episodes is that the size of the price move depends less on the attack itself than on how much supply is lost and for how long, and on how much spare capacity and stock is available to replace it.

How much buffer is left?

Much less than in 2019. The International Energy Agency (IEA) said OPEC+ effective spare capacity fell to 320,000 barrels a day in March 2026, the lowest on record, because most spare capacity sits behind the Strait of Hormuz ^[7]. In 2019, by comparison, the US Strategic Petroleum Reserve alone held about 660 million barrels ^[20].

Emergency stocks have also been drawn down. IEA members agreed a record release of 400 million barrels on 11 March ^[8]. Fortune reports that public stocks held by IEA members have fallen to about 1.1 billion barrels, including more than 200 million barrels of diesel, from more than 1.2 billion in March, and that the US Strategic Petroleum Reserve (SPR) holds about 284 million barrels, the lowest since 1982, heading towards about 243 million ^[9].

The physical system is already stretched. The US Energy Information Administration (EIA) estimates Middle East crude shut-ins at 4.8 mb/d in September, and Brent spot reached $131 on 15 September after drones hit pumping stations on Saudi Arabia's East-West pipeline, the main route around Hormuz ^[10].

Which facilities matter most?

A small number of sites carry a large share of Gulf supply. The table below lists capacities given in published sources; it is not a list of targets, and figures for several other large refineries were not available from the sources we could verify.

Several of these were hit earlier in the war. Bloomberg's list of damaged sites includes Ras Tanura, the SAMREF refinery at Yanbu, Bahrain's Bapco refinery under force majeure, Kuwait's Mina Al-Ahmadi and Mina Abdullah, and gas plants in the UAE ^[11]. Qatar's Ras Laffan, which has 77 million tonnes a year of LNG capacity, has about 17% of its output shut in for two to three years, according to Goldman Sachs ^[12]. Before the September attack, the East-West pipeline was carrying about 5.5 mb/d, of which about 4.5 mb/d was for export from Yanbu ^[13]. Refineries matter as much as crude: the IEA says diesel prices are still close to double their pre-crisis levels ^[14].

What do forecasters say about an escalation?

Published forecasts give a wide range, and their dates matter because the situation has changed several times this year.

• Goldman Sachs (16 October) expects December Brent at $90 and an average of $80 in 2027, with a surplus from the fourth quarter. It estimates a risk premium of nearly $25 a barrel above fair value and describes renewed attacks on ports, pipelines or fields as a "significant net upside risk", without giving a price ^[15].
• The EIA (6 October) forecasts Brent at $105 in the fourth quarter and $83.74 in 2027, assuming Hormuz stays constrained. Its inputs were set before the late-October rally and it has no escalation scenario ^[10].
• Bank of America's Francisco Blanch said on 26 October that $120 is "probably on the cards" on average if Iran resumes infrastructure attacks; Commonwealth Bank of Australia's Vivek Dhar said prices may need to reach $150 to force demand destruction in emerging Asia; DBS sees $100–110 into the midterms ^[2].
• Capital Economics wrote in March that in its adverse case Brent "could remain in triple-digit territory through 2026 and 2027" ^[16].

What would it mean for fuel prices in Europe and the US?

None of the sources we reviewed publishes a model of how a given rise in crude feeds into pump prices, so any estimate should be treated with care. What can be measured is where prices are starting from. The US average retail diesel price was $6.352 a gallon on 26 October, against $3.809 before the war ^[17]. In the European Union the average diesel price was €2.146 a litre in the week of 26 October, 40.4% higher than a year earlier ^[18].

Diesel is likely to react more than petrol in an escalation because Gulf product exports are already well below normal and emergency diesel stocks are being used. Goldman Sachs estimated in March that a 10% rise in oil adds about 0.3 percentage points to euro area headline inflation, Euronews reported ^[19].

What signals should market participants watch?

• The Iranian reply to the US proposal and any agreement that reopens Hormuz, which would push prices the other way ^[3].
• Official confirmation of attacks. Several October claims against Saudi facilities were not confirmed by Saudi authorities; markets reacted most to confirmed supply losses ^[2].
• Bypass routes. The East-West pipeline and Fujairah carry most of the barrels that avoid Hormuz ^[13].
• Stock policy. Whether the IEA and the US agree further releases beyond the March programme, after members agreed on 15 October to speed up the remaining 100 million barrels ^[9,21].
• Diesel cracks and freight, which have tended to move before crude in this crisis ^[14].

This article summarises published data and forecasts; it is not a prediction or investment advice. Alupetra follows crude and product markets daily on its price pages.