Global oil prices fell by nearly 2 percent on Monday, October 26, retreating from near six-month highs as hopes grew of easing hostilities between the United States and Iran, although continued attacks on Saudi Arabia kept investors cautious.
Brent crude fell to $114.51 a barrel, down $2.21 or 1.89 percent, while US West Texas Intermediate (WTI) dropped to $101.04, down $2.23 or 2.16 percent. At 158.9 litres to a barrel and the CBK’s rate of Sh129.89 to the dollar on Friday, that puts Brent at about Sh14,874 a barrel, or Sh93.60 a litre, and WTI at about Sh13,124 a barrel, or Sh82.59 a litre.
The fall follows last week’s surge. Brent finished the week up 6 percent and WTI up 2.3 percent after prices settled nearly $3 higher on Friday on Houthi attacks on Saudi Arabia. On Sunday, Qatari mediators travelled to Tehran as part of efforts to de-escalate regional tensions in coordination with the United States, an official briefed on the situation said.
The diplomacy has not stopped the fighting. The Iran-backed Houthis said they struck an airport and oil facilities in Saudi Arabia on Saturday. A PVM Oil Associates analyst said the double risk of the Houthi attacks and tensions with Iran means that any dips in Brent back to last week’s lows would find buyers. Traders are also worried that Trump has not dispelled expectations that strikes on Iran could follow after the November 3 midterm elections.
The International Energy Agency’s head, Fatih Birol, said on Monday at an industry event in Singapore that he does not expect energy markets in 2027 to return to where they were before the Iran war, which began on February 28 and has disrupted shipping through the Strait of Hormuz and the Bab el-Mandeb Strait. Brent is up nearly 90 percent this year, which analysts say left the market overbought.
For Kenya, which imports nearly all its refined fuel, the price moves feed into the monthly pump price review by the Energy and Petroleum Regulatory Authority. Super petrol is capped at Sh226.96 a litre in Nairobi after the October 15 review, and the next one is due on November 14.
