War And Peace and War Again. The Energy Report 10/22/2026

Oil is back in war mode, after peace talks are answered with new threats sanctions and missile barrages. The U.S. reportedly ordered non-emergency personnel and their families to leave its missions in Saudi Arabia as a fresh wave of Houthi attacks rattled the region. At the same time, Ukrainian President Volodymyr Zelenskyy told Fox & Friends he was open to freezing the current front lines as a path toward negotiations—“freeze and stop,” as he put it, echoing President Trump.
Putin also agreed in principle to resume U.S.-mediated trilateral talks after November 10, while Trump said the two sides may be close to a deal “for the first time in a long time.” That would be a game changing development if true.  The hope was for a peace dividend and a chance to give a reason to allow more diesel from Russia to flow and fix those refineries that have been Ukraine’s favorite target.
So much for the peace dividend. Another Russian barrage quickly drowned out the diplomatic chatter. Ukrainian air defenses said they downed or suppressed 181 drones, yet reports indicated that not one ballistic missile was intercepted. Strikes across 12 regions damaged homes, energy facilities, rail and metro systems, shopping centers, businesses, a monastery, and an ambulance station.
Zelenskyy said two people were killed and 34 injured, including five children. Early reports from Kyiv put the toll in the capital at one dead and roughly 22 to 24 wounded.
The timing could not have been more maddening as it the attack came just hours after U.S. envoy Steve Witkoff met Putin in St. Petersburg and the Kremlin signaled openness to renewed trilateral talks.
Zelenskyy called the assault Russia’s answer to diplomacy and sarcastically labeled the attackers “humanists.”
It’s not just Ukraine. Iran-backed Houthis are still hitting Saudi Arabia. Debris from an intercepted drone near Aramco’s Shaybah field killed two contractors and injured two; the Saudis said operations weren’t affected.
Hours later an attack on King Fahd International Airport in Dammam killed one and injured eight. The State Department pointed to the string of Iranian-backed strikes on civilian airports and critical infrastructure and ordered non-emergency U.S. staff and families out of Saudi Arabia. Also Iran is threatening to target U.S. political figures if military strikes resume, according to Fars News. A senior Iranian security official said Tehran is assuming an attack by the U.S. and Israel and views American diplomatic gestures as invalid.
That kind of risk is why Brent is sitting above $110.Treasury is still rolling out Operation Economic Outcast sanctions against more of Iran’s shadow fleet and facilitators. Tehran’s response has been the usual warnings—if the U.S. hits Iranian energy, nuclear, or military targets, they could broaden the retaliation, including threats aimed at European or U.S.-linked assets. Hormuz and Gulf energy infrastructure stay the obvious pressure points.
Still, WTI cannot seem to plant its flag above the century mark. Saudi headlines and broader Middle East supply fears pushed prices back toward $100 overnight, but crude has repeatedly failed to hold that key psychological level for long.
Maybe the answer is in the barrels. Kpler ship-tracking data and estimates from Morgan Stanley and other trading houses show crude exports through the Strait of Hormuz and the wider Gulf running above pre-conflict levels in recent weeks. Yet strong flows do not mean smooth sailing. Tanker attacks continue, refined-product shipments remain constrained, and the U.S. drawdown shows officials still see serious risks to people and critical infrastructure.
ING and PVM analysts make the point: healthy export volumes are no match for continued strikes on ships and Saudi facilities. The geopolitical bid is alive and well.
Brent is showing more muscle, climbing back into the low-to-mid $110s. The war premium is real, but so are the market’s jitters whenever de-escalation talk hits the tape. We saw that hesitation after reports of Iranian peace feelers and Ukrainian
The EIA report yesterday was pretty encouraging if you’re looking at the big picture for U.S. energy. Crude stocks drew a solid 3.1 million barrels down to 412.5 million—better than the market expected—and they’re sitting about 3% under the five-year average.
That’s three weeks in a row of draws, so the inventory side still looks tight.
What really stands out is U.S. production. It came in at 13.269 million barrels a day. Yeah, it was down about 410,000 from the prior week because of some lingering Hurricane Isaias effects in the Gulf, but most of that output was already back online by mid-week.
Even with the temporary dip, we’re still running at those historically strong levels the U.S. has been putting out. The shale patch and overall domestic production machine keep delivering near-record volumes week after week.
That’s the story that matters for the longer term—America is still producing at a pace that keeps the global balance from getting too loose. On the product side, distillate (diesel and heating oil) built 1.7 million barrels to 104.3 million, which was a surprise versus the expected draw.
Production of distillate picked up to 5.2 million barrels a day and helped fill some tanks, but stocks are still 9% below the five-year average.
Gasoline stocks dropped 3 million barrels and sit 5% under normal, with production holding around 9.8 million a day.
Refineries ran at a healthy 93.4% of capacity.
All in all, the draw in crude was solid, U.S. production remains impressively high even after the storm hiccup, and diesel is still tight relative to where it normally sits heading into winter.
The comes as the International Energy Agency warns the price of oil is only part of what drives the cost of keeping the world supplied with fuel.
The IEA says surging tanker costs are adding pressure throughout the oil supply chain. Middle East disruptions have driven freight rates to historic highs, with the cost of shipping crude from the Gulf to Asia topping $37 a barrel by mid-October—more than five times the pre-war level and a serious threat to refinery margins, especially in Asia.
The IEA says longer routes, diversions, and ship-to-ship transfers keep vessels tied up and push rates higher. Sanctions on Russian and Iranian oil have also expanded the shadow fleet—vessels operating outside normal shipping arrangements to move Russian and Iranian oil—and further reduced the pool of ships available to the broader market.
Well at least here in beautiful Lake Geneva, WI, we’re getting an extended Indian summer — which is not exactly bullish for natural gas. It’s down slightly this morning (hovering near $2.77/MMBtu, off roughly 0.7-0.9% from the prior close).
That story is running throughout the country as the Fox Weather outlook shows mild-to-above-normal temperatures lingering across large parts of the Midwest, Upper Mississippi Valley, and much of the East.
Fox Weather and the broader seasonal outlooks have been highlighting how summer is trying to hold on into late October. Under the influence of a strengthening El Niño pattern, above-normal temperatures are favored across much of the central and eastern U.S., with the Rockies and Northern Plains also leaning warm.
Today Russian President Vladimir Putin’s envoy Kirill Dmitriev said at an economic forum in Istanbul that the Nord Stream gas pipelines, damaged by underwater explosions in 2022, will resume operations in the future, calling it “economically inevitable.” He added that the broader resumption of energy supplies from Russia is “absolutely inevitable.” Of course is that going to mean Europe is going to buy it?
Highs in the 70s around Lake Geneva today (and similar mild readings elsewhere) mean little early heating demand and subdued power-sector burn in the shoulder season.
That keeps residential/commercial load soft and gives the market more room to inject into storage rather than draw.
Today’s EIA report is the key near-term event. Working gas stood at 3,567 Bcf as of October 9 after a 67 Bcf build (smaller than most estimates and well below the five-year average for that week).
Stocks were about 45 Bcf above the five-year average but roughly 143 Bcf below year-ago levels.
For the week ending October 16, analysts are looking for a larger injection in the low-to-mid 80s Bcf range. NGI has pegged it around 82 Bcf (versus a five-year average near 87 Bcf and last year’s 86 Bcf). Other calls have run a bit higher, near 89 Bcf.
The mild weather last week (limited heating and residual cooling demand fading) plus the seasonal drop in power generation load support a solid build, even with production off its late-summer record highs and LNG feedgas remaining relatively firm.
A print near or above the five-year average would reinforce the current weather-driven pressure on prompt prices and keep the end-of-injection-season inventory outlook comfortable (EIA has been looking for roughly 2% above the five-year average heading into November).
A meaningful miss to the low side could give the market a short-term bounce, but the persistent mild outlook through the end of the month is the bigger headwind right now.
The extended Indian summer is doing the bears a favor by delaying meaningful heating demand. Watch the storage number today for any surprises, but until the Fox weather models turn colder and more consistently into early November, natural gas is likely to stay under pressure in this shoulder-season environment.
So, make sure you download that fox weather app to keep up with the latest on the weather swings you should also stay tuned to the Fox Business Network. Sign up for my willy popular trade levels and open an account by calling 888-264-665 or mail at pflynn@pricegroup.com.