Oil Jumps Over 3% as Gulf Supply Risks Intensify
Oil prices surged more than 3% on Monday as fresh attacks on Saudi Arabia and vessels in the Gulf deepened concerns over global energy supplies following the shutdown of a key Saudi oil pipeline.
Brent Crude Climbs Above $107 a Barrel
Brent crude futures rose $3.21, or 3.1%, to $107.82 a barrel, while US West Texas Intermediate gained $3.17, or 3.2%, to $103.22.
The renewed increase followed a volatile week in which oil prices remained above $100 as traders assessed the risk of prolonged disruption to Middle East exports.
Markets are increasingly focused on whether Saudi Arabia can maintain shipments if alternative export routes remain compromised.
Saudi East-West Pipeline Shutdown Raises Supply Fears
Saudi Arabia temporarily shut its East-West pipeline after drone attacks damaged infrastructure.
The pipeline carries crude from the kingdom’s eastern oil-producing regions to the Red Sea, providing an important alternative to shipping through the Strait of Hormuz.
Its closure could affect flows equivalent to around 4% of global oil supply if disruption continues. Saudi inventories at the Red Sea terminal of Yanbu could provide only a limited buffer if repairs take longer than expected.
Strait of Hormuz Attacks Add to Oil Market Pressure
Supply concerns intensified after another vessel was struck while travelling through the Strait of Hormuz, forcing its crew to evacuate after a fire broke out.
Yemen’s Houthis have also expanded operations around Saudi Arabia and the Red Sea, increasing pressure on another major global shipping corridor near the Bab el-Mandeb Strait.
Diplomatic efforts have simultaneously suffered a setback after planned talks between Iran and Gulf countries in Oman were postponed, leaving markets concerned that regional instability could continue supporting elevated energy prices.
