Brent crude briefly surpassed $117 a barrel in October 2026, driving the energy sector up nearly 12% as war-related supply disruptions and geopolitical tensions in the Middle East rattled global markets and prompted Wall Street banks to raise forecasts.
Crude Prices Surge Amid Middle East Supply Disruptions
The energy sector advanced 11.67% over the month, outperforming a 1.1% fall in the broader market as geopolitical risks lifted crude to its highest level in more than six months. Global energy markets wrapped up October weighing ongoing supply threats, historically depleted U.S. emergency petroleum reserves, and a fourth straight monthly increase in crude against renewed diplomatic optimism. Prices found ongoing support from threats to Saudi energy facilities and attacks on tankers near the Strait of Hormuz, even though oil dropped across multiple sessions as talks fostered hopes for a reduction in regional friction.
Brent crude briefly surpassed $117 a barrel to reach its highest level since April. Wall Street banks responded by raising their price forecasts, with UBS projecting Brent could reach $110 per barrel by the end of 2026.
Multiplo Invest, an analyst with Seeking Alpha, pointed out that petroleum and fuel prices were driven upward during the month by several developments, including a reduction in Strait of Hormuz shipping volumes, fresh assaults on Persian Gulf vessels, and prospects of a fresh U.S. military campaign against Iran.
APA and ConocoPhillips Lead Sector Gains While Refiners Struggle
APA was the month’s best performer, gaining 21.87%, closely followed by ConocoPhillips, which rose 21.2% in October. Pure oil companies led the month’s gains due to their high sensitivity to commodity prices. APA had 17 analysts raising expectations for its results, while ConocoPhillips saw 20 analysts elevate earnings expectations.
Valero Energy was the sector’s worst performer, slipping 2.15%, followed by Texas Pacific Land, which lost 1.42%. Conversely, refiners and independent operators faced headwinds. Valero Energy is one of the largest independent refiners in the United States, meaning the release of strategic reserves from Europe and relief from Russian sanctions negatively impacted its margins amid expectations of lower product spreads ahead.
| Company / Asset | October Performance | Key Metric or Rating |
|---|---|---|
| APA | +21.87% | Best Sector Performer |
| ConocoPhillips | +21.2% | Strong Earnings Expectations |
| Valero Energy | -2.15% | Quant Rating: Strong Buy (4.98/5) |
| Texas Pacific Land | -1.42% | Quant Rating: Hold (3.16/5) |
| Baker Hughes | -0.70% | Quant Rating: Hold (3.20/5) |
U.S. Strategic Petroleum Reserve inventories fell to approximately 282.6 million barrels, marking their lowest level since 1982. Adding to supply side pressures, the decline reflects cumulative emergency withdrawals intended to support energy markets during a prolonged period of geopolitical disruption, leaving the global energy system with diminished buffer capacity.