Saudi Oil Pipeline Shutdown Sparks Global Oil Price Surge Amid Middle East Tensions

Oil prices rose more than 2% on Monday as fresh Houthi attacks on Saudi Arabia and Iranian strikes on vessels in the Gulf added to supply concerns following the shutdown of a key Saudi oil pipeline. Brent crude futures rose $2.90, or 2.77%, to $107.51 a barrel.

Meanwhile, US West Texas Intermediate (WTI) crude gained $2.27, or 2.27%, to $102.32 a barrel.

Prices Had Initially Climbed More

Prices had initially climbed more than 3% at the market open. Brent rose $3.62, or 3.46%, to $108.23 a barrel, while US WTI crude increased 15%, to $103.20 a barrel. Saudi state media on Sunday released footage showing damage to homes and a mosque in the southern Jazan province following what it described as a Houthi attack.

A vessel in the Strait of Hormuz was struck The incident happened off the country’s coast. Iranian commercial vessels have been targeted in recent months amid escalating tensions in the region.

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Saudi Arabias Eastwest Oil Pipeline

Saudi Arabia's East-West oil pipeline was shut on Friday following a drone attack originating in Iraq. The shutdown threatens up to 4% of global oil supply. The pipeline allows Saudi Arabia, the world’s largest oil exporter, to reroute shipments and avoid the Strait of Hormuz.

The Iran-aligned Houthis reached the strategic island of Perim on Friday, tightening their position near the Bab el-Mandeb Strait. The region has been a key oil transit route, carrying 4-5% of global supply in recent months.

Omani foreign minister Badr Albusaidi said on X that the meeting had been postponed “in the interests of consensus”. The meeting was expected to focus on efforts to manage shipping through the Strait of Hormuz.

No peace talks have taken place in the war. Which began six months ago with US and Israeli strikes, since an interim agreement reached in June fainted after a few weeks. The conflict has raised concerns over global supplies and oil prices.

Oil prices have risen around 8% over the past week, crossing $100 a barrel for the first time since July. The escalation of tensions in the Middle East has contributed to the price surge.

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Nearly one-fifth of the world’s oil passed through the strategic waterway before the war began. With both the United States and Iran seeking to exert control over it. Oman postponed a scheduled meeting with Iran and other regional countries on Monday to discuss the management of shipping through the Strait of Hormuz.

The meeting was expected to focus on efforts No peace talks have taken place in the war. Which began six months ago with US and Israeli strikes, since an interim agreement reached in June fainted after a few weeks.

Oil prices rose more than 2% on Monday as fresh Houthi attacks on Saudi Arabia and Iranian strikes on vessels in the Gulf added to supply concerns following the shutdown of a key Saudi oil pipeline.

Saudi state media on Sunday released footage showing damage to homes and a mosque in the southern Jazan province following what it described as a Houthi attack. The Iran-aligned Houthis also shared they had targeted a Saudi military base in a neighbouring province.