Key Takeaways
- Oil prices jumped over 2% after Houthi strikes on Saudi Arabia and Iranian attacks in the Gulf.
- The closure of a key Saudi oil pipeline and the attack on a vessel in the Strait of Hormuz heightened supply concerns.
- Brent crude futures rose to $107.51 per barrel, while WTI futures reached $102.32 per barrel.
Oil prices surged more than 2% on Monday, driven by new Houthi strikes on Saudi Arabia and Iranian attacks in the Strait of Hormuz, according to market reports.
Brent crude futures increased by $2.90, or 2.77%, to $107.51 per barrel by 2313 GMT, while WTI futures climbed $2.27, or 2.27%, to $102.32 per barrel.
Saudi Arabian state media released video footage of damage to homes and a mosque from a Houthi attack on the country’s southern Jazan province, while the Houthis claimed to have struck a Saudi military base in a neighboring province.
A British maritime security agency, UKMTO, reported that a vessel in the Strait of Hormuz was struck by a projectile, causing a fire and forcing the crew to be evacuated.
Iran stated that one person was killed and four crew members were wounded aboard an Iranian commercial vessel struck off its coast.
The loss of the East-West oil pipeline, shut down by a drone strike originating in Iraq, threatens up to 4% of global oil supply, as it helped Saudi Arabia reroute its exports to avoid the Strait of Hormuz.
Yemen’s Houthis had reached the strategic island of Perim, moving to tighten their control over the Bab el-Mandeb Strait, another key oil transit lane.
Oil prices had already surged 8% higher on the week due to these disruptions, rising above $100 for the first time since July.
IG market analyst Tony Sycamore warned that unless talks in Oman produce something operational or the East-West pipeline is quickly brought back online, crude oil could continue to extend its gains toward the $119.48 high of early March.
