Oil Is Back at $110. Who Wins, Who Pays, and 4 Ways It Could End.

Brent crude climbed back above $110 a barrel on Oct 22 after fresh attacks on Saudi Arabia and ships near the Strait of Hormuz. Every dollar of that price is someone's profit and someone else's cost. Here is who sits on each side, why prices are this high, and the four moves that could bring them down.

HeyTheo Research · Thursday, October 22, 2026

Quick Read

• Brent rose to about $110.75 and US crude to about $98.58 on Oct 22, after Houthi strikes on Saudi targets and reports of ships hit and mines struck near the Strait of Hormuz.

• Winners: refiners like Marathon Petroleum (MPC) and Valero (VLO), integrated majors like ExxonMobil (XOM), up about 49% this year, and US producers.

• Losers: airlines, where jet fuel costs about 84% more than a year ago, plus truckers and consumers paying for diesel above $6.50 a gallon.

• Four possible relief valves: emergency oil releases, the Russia sanctions waiver, a Middle East ceasefire, and demand slowing on its own. The US emergency reserve is at its lowest level since 1982, which limits the first.

Why oil is at $110

The short answer: the world's most important oil route is still not working normally, and the buffers are thin.

The Strait of Hormuz. About a fifth of the world's oil normally passes through it. Since the Iran war began in late February, traffic has stayed far below normal, even after the April ceasefire. The International Energy Agency called it the largest supply disruption in the history of the oil market.

New attacks. On Oct 21, Houthi strikes hit several Saudi targets, including a drone attack on an oil field. Iran's Revolutionary Guard said four ships were hit in the northern Persian Gulf and three struck mines west of the Strait.

Thin buffers. Supply from affected Gulf producers and Russia is still about 5.5 million barrels a day below a year ago. US commercial crude stocks fell 3.1 million barrels last week to 412.5 million, below their five-year average. The Strategic Petroleum Reserve holds about 283 million barrels, its lowest level since 1982.

Source: Reuters via BOE Report, EIA, Crux Investor, RiskStock, Wikipedia summary of EIA data

The winners

Refiners. When crude spikes, the price of gasoline, diesel and jet fuel usually rises even faster. The gap between the two, called the crack spread, is a refiner's margin. Marathon Petroleum, Valero and Phillips 66 (PSX) all beat estimates by wide margins last quarter, and Marathon's shares had more than doubled this year by September.

Integrated majors. ExxonMobil is up about 49% this year. Its own filing shows where the money comes from: wider refining margins are expected to add about $4.5 billion to third-quarter fuel earnings versus the second quarter. Chevron (CVX) has the same mix of production and refining.

US producers. Companies like EOG Resources (EOG) and ConocoPhillips (COP) sell oil at the world price but pump it far from the Gulf. Every dollar above their costs drops to profit.

Research cue · try it in HeyTheo

Ask Theo for the bull case, bear case and what to watch on Valero, and add: "how much of its profit comes from the crack spread, and what happened to it after the April ceasefire?" It shows how quickly refiner earnings can reverse when crude falls. Open HeyTheo

Start with: search VLO, then ask the question above.

The losers

Airlines. Jet fuel has risen about twice as fast as crude. Delta Air Lines (DAL) said its quarterly fuel bill rose 62% and cut its full-year outlook entirely because of fuel. United Airlines (UAL) expects close to $6 billion of extra fuel costs this year, and American Airlines (AAL) about $1 billion extra in the fourth quarter alone. Southwest (LUV) trimmed its growth plans.

There is a split inside the group, though. United rose 6% on Oct 21 after record revenue and a forecast of 20%-plus revenue growth, saying it can pass fuel costs on to passengers, with a lag. Delta owns a refinery, which earns more when fuel margins widen and offsets part of its bill. As we laid out in our note on Delta and diesel, that hedge only covers part of the exposure.

Truckers and anyone who ships goods. Diesel near $6.50 a gallon raises the cost of moving almost everything. Those costs work their way into prices on store shelves.

Consumers and the Fed. Higher fuel prices push up inflation. As we covered in our guide to reading inflation this fall, fuel is already showing up in airline fares, and a hot inflation report keeps rate hikes on the table.

Research cue · try it in HeyTheo

Build two baskets: oil winners (a refiner, a major and a US producer) and oil payers (two airlines and a trucking company). Track the gap between them. If it narrows while oil holds above $100, the market is starting to price relief before it arrives. Open HeyTheo

Start with: search VLO for the first basket and UAL for the second.

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Four ways it could end

1. Emergency releases. The US is releasing 172 million barrels as part of a 400-million-barrel international effort, and G7 leaders agreed on Oct 2 to another 100 million over four months, front-loaded with diesel. Washington is also offering to lend up to about a third of its 1-million-barrel heating oil reserve. The limit: the US reserve is already at a 44-year low, so there is less left to release.

2. The Russia sanctions waiver. On Oct 19, the White House waived some sanctions and tariffs on Russian energy. Brent fell about 2% that day. The limit: it adds no barrels right away, and its effect will be reviewed over about 60 days. Separately, the Kremlin said it will resume US-mediated Ukraine peace talks as soon as next month.

3. A Middle East ceasefire. This is the one that has worked before. After the April 8 ceasefire, Brent fell from about $118 to about $70 by early July. The limit: no new talks have been reported, and attacks are escalating, not easing.

4. Demand slowing. At $110, some buyers cut back. Airlines are trimming flights and drivers drive less. The limit: it is slow, and it works by hurting the economy.

Forecasters are not expecting quick relief. DBS sees Brent at $100 to $110 through the US midterm elections, and Morgan Stanley raised its fourth-quarter forecast to $105.

The bull and bear case

For the winners. Bull: tight supply, thin inventories and no ceasefire in sight keep prices and margins high. Bear: a ceasefire could cut prices fast, as it did in April, and refiner and producer profits would follow them down.

For the payers. Bull: airlines are passing costs to passengers, demand for travel is holding up, and any relief would lift them quickly. Bear: if oil stays above $100 into 2027, fuel keeps eating profits and capacity cuts deepen.

Research cue · try it in HeyTheo

Set a trigger on any airline or refiner you hold: "tell me if Brent moves more than 5% in a day." Then use the backtester to see how the stock traded after the April ceasefire. It shows how quickly each side reacts when oil turns. Open HeyTheo

Start with: search the stock you hold, then set the Brent trigger.

Research it yourself: rules HeyTheo tracks

• Oil winners vs payers. Two baskets tracked against each other, to see which side the market favors as oil moves.

• Commodity move trigger. Flags any day crude oil moves more than 5%.

• Fuel cost trigger. Flags when a company you hold cuts guidance because of fuel or energy costs.

• Ask Theo. Try: "Which of my holdings are most exposed to oil prices?" or "Give me the bull and bear case on airlines if Brent stays above $100."

Check the rule behind any trigger before acting on it. You trade through your own broker; HeyTheo helps you decide.

Who Holds the Barrel

Oil at $110 is a transfer. Refiners, majors and US producers collect it. Airlines, truckers and households pay it. The size of that transfer depends on one route through the Persian Gulf and on how much the world has left in storage.

Of the four relief valves, only a ceasefire has moved prices sharply before, and none is close right now. Know which side of the barrel your holdings sit on, and how fast they would swing if that changed.

Start your own first pass. Download HeyTheo, add the stocks you hold, and run the three cues above to see your oil exposure. Get the app

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Sources

Reuters, BOE Report, EIA, IEA, US Department of Energy, Rigzone, Crux Investor, ExxonMobil, TIKR, RiskStock, 24/7 Wall St., MarketBeat, DBS, Morgan Stanley

Disclaimer

Disclaimer: HeyTheo is a research and education platform, not an investment adviser or broker-dealer. Nothing here is advice to buy, sell, or hold any security. You trade through your own broker; HeyTheo helps you decide. Backtested results are hypothetical and do not guarantee future returns. References to governments, officials, or policies are for market context only and are not political endorsements. All investing involves risk, including loss of principal. Data is as of the dates noted.