- Oil prices rose more than $3 a barrel at the market open on Monday, following new strikes on Saudi Arabia and ships in the Gulf on Sunday.
- Brent crude futures increased by $3.62, or 3.46%, to $108.23 per barrel, while WTI futures rose $3.15, or 3.15%, to $103.20 per barrel.
- Houthi militants struck energy facilities in Saudi Arabia, injuring more than 70 people, according to Saudi Arabian state media.
- A drone strike originating from Iraq damaged Saudi Arabia's East-West pipeline, leading to its shutdown, which has raised concerns about oil supply.
- New strikes on Sunday hit Saudi Arabia and a vessel in the Strait of Hormuz, causing a fire and forcing the crew to evacuate, as reported by the British maritime security agency UKMTO.
- A scheduled meeting in Oman between Gulf countries and Iran to discuss the Strait of Hormuz was postponed following the recent attacks.
- The East-West pipeline can carry 7 million barrels per day and has been crucial in stabilizing oil markets amid disruptions caused by the Iran war.
- Saudi Arabia has relied on the East-West pipeline to shift crude oil exports away from the Gulf due to ongoing tensions in the region.
Oil prices jumped more than 2% on Monday as new strikes on Saudi Arabia and vessels in the Strait of Hormuz heightened supply concerns. Brent crude futures rose $3.62 to $108.23 per barrel, while WTI futures increased $3.15 to $103.20 per barrel.258
The escalation follows a Houthi attack on Saudi Arabia's southern Jazan province, which resulted in damage to homes and a mosque. The Houthis also claimed responsibility for striking a Saudi military base nearby. Additionally, a vessel in the Strait of Hormuz was hit by a projectile, leading to a fire and crew evacuation, according to the British maritime security agency UKMTO.
The East-West pipeline, which can transport 7 million barrels per day, remains shut after a drone strike from Iraq. This pipeline is vital for Saudi Arabia, the world's largest oil exporter, to manage its oil supply amid ongoing regional tensions. “Looking ahead, unless this week's talks in Oman produce something operational... the risk is that crude oil continues to extend its gains,” noted IG market analyst Tony Sycamore.47
Diplomatic efforts to address the situation have stalled, with a scheduled meeting between Gulf countries and Iran postponed. The security situation in the Strait of Hormuz remains precarious, with further attacks on tankers reported.6
Saudi Arabia has faced increasing assaults from Iran-aligned groups, with Houthi militants targeting energy facilities and civilian assets, injuring over 70 people last week. The Houthis have also seized strategic positions in the Bab el-Mandeb Strait, potentially disrupting oil flows to global markets.3
“Brent crude rose $3.62 to $108.23 per barrel, while WTI gained $3.15 to $103.20. The Houthis also struck a Saudi military base, and a vessel in the Strait of Hormuz was hit, causing a fire and crew evacuation, with Iran reporting one killed and four wounded.”
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