Oil prices climbed by nearly 3 per cent on Monday as fresh attacks on Saudi Arabia’s energy and civilian infrastructure, alongside attacks on vessels in the Gulf, heightened concerns over global crude supplies.
Brent crude futures rose by $2.93, or 2.8 per cent, to $107.54 per barrel at 0700 GMT, while US West Texas Intermediate (WTI) futures gained $2.88, or 2.9 per cent, to $102.93 per barrel.
The latest increase came after attacks intensified around Saudi Arabia’s energy infrastructure, including an assault on the country’s strategically important East-West oil pipeline.
ING commodity strategists said the escalation had increased concerns about the pipeline, although they noted that the extent of any damage and the duration of the shutdown remained unclear.
Saudi officials said the East-West pipeline was temporarily taken offline following a drone attack. The pipeline is strategically important because it allows Saudi Arabia to transport crude to the Red Sea, reducing its dependence on the Strait of Hormuz for exports.
The disruption has raised concerns about as much as 4 per cent of global oil supplies, while industry sources familiar with Saudi exports said inventories at the Red Sea port of Yanbu could support only about five to seven days of exports.
Saudi state media on Sunday also released footage showing damage to residential buildings and a mosque in the southern Jazan province following what authorities described as a Houthi attack.
The Iran-aligned Houthis also claimed to have targeted a Saudi military base in a neighbouring province.
Tensions have also spread to shipping routes. The British maritime security agency UKMTO said a vessel travelling through the Strait of Hormuz was hit by a projectile on Sunday, resulting in a fire and the evacuation of its crew.
Iran separately reported that one person died and four crew members were injured after an Iranian commercial vessel was struck off the country’s coast.
The situation has added to concerns over the safety of major oil transportation routes. Yemen’s Houthis reached the strategic island of Perim on Friday, with the development raising fears that their position could strengthen around the Bab el-Mandeb Strait.
The waterway has carried about 4 to 5 per cent of global oil supplies in recent months, making disruptions there another potential threat to international energy markets.
Oil prices had already surged by about 8 per cent last week amid the supply disruptions, pushing crude above $100 per barrel for the first time since July.
Diplomatic efforts to address tensions around the Strait of Hormuz have also faced setbacks. Oman’s Foreign Minister, Badr Albusaidi, said on X on Sunday that a meeting scheduled for Monday in Oman between Gulf states and Iran to discuss the strategic waterway had been postponed.
The war, which began six months ago with military action by the United States and Israel, has not seen renewed peace negotiations since an interim agreement reached in June collapsed.
