Key Takeaways
- Oil prices rose over 3% following Houthi strikes on Saudi Arabia and Iranian attacks in the Gulf.
- The closure of Saudi Arabia’s East-West oil pipeline threatens up to 4% of global oil supply.
- Disruptions in the Strait of Hormuz and Bab el-Mandeb strait have further compounded supply concerns.
Oil prices surged more than 3% on Monday, driven by a series of attacks on Saudi Arabia and Iranian actions in the Gulf, according to market reports.
Brent crude futures climbed to $107.82 per barrel, while WTI futures reached $103.22 per barrel, reflecting the heightened supply concerns.
The attacks included a drone strike on Saudi Arabia’s East-West oil pipeline, which was temporarily shut down, potentially affecting up to 4% of global oil supply.
Saudi officials reported that the pipeline, which helps avoid the Strait of Hormuz and reroutes exports, was out of service, with Yanbu having enough inventory to cover just five to seven days of exports.
The Houthi group claimed responsibility for attacks on a Saudi military base and a residential area in Jazan province, causing damage to homes and a mosque.
In the Strait of Hormuz, a projectile struck a vessel, causing a fire and forcing the crew to be evacuated, while Iran reported one death and four injuries aboard a commercial vessel.
Yemen’s Houthis have advanced to the strategic island of Perim, tightening their control over the Bab el-Mandeb strait, which carries 4%-5% of global oil supply.
Omani Foreign Minister Badr Albusaidi announced that a scheduled meeting between Gulf countries and Iran to discuss the Strait of Hormuz had been postponed.
The attacks come amid ongoing tensions and lack of peace talks since an interim agreement in June collapsed, exacerbating concerns over regional stability and oil prices.
