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Brent Crude Surges as Saudi Pipeline Shutdown Fuels Supply Concerns
Confirmed
In Short: Brent crude futures rose sharply on Monday, hitting $107.82 per barrel, after a drone attack on Saudi Arabia's East-West pipeline, which supplies up to 4% of global oil.
Oil prices surged more than 3% on Monday, with Brent crude futures hitting a session high of $108.65, as a drone attack on Saudi Arabia's East-West pipeline threatened up to 4% of global oil supply, according to reports. The pipeline, which helps Saudi Arabia avoid the Strait of Hormuz by rerouting oil to the Red Sea, was shut down after the attack, according to Saudi officials.
Fresh attacks on Saudi Arabia and Gulf vessels add to global crude supply risks, with the Houthis claiming to have targeted a Saudi military base in a neighboring province. The attacks followed the closure of Saudi Arabia’s East-West oil pipeline after a drone strike Friday that originated in Iraq, according to reports. The 1,200-kilometer pipeline allows Saudi Arabia, the world’s largest oil exporter, to transport crude while bypassing the Strait of Hormuz.
Unless this week's talks in Oman produce something operational or the East-West pipeline is brought back online quickly, the risk is that crude oil continues to extend its gains toward the $119.48 high of early March," said IG market analyst Tony Sycamore in a note. "LONDON: A fresh wave of attacks across key Middle East energy routes sent oil prices more than 2% higher Monday, as traders weighed growing threats to crude supplies.
What's confirmed
- The shutdown of the pipeline, which helps Saudi Arabia avoid the Strait of Hormuz by rerouting them to the Red Sea, threatens up to 4% of global oil supply.
What's still developing
- With the pipeline out of service, the Red Sea port of Yanbu will have to draw on storage, which is estimated to cover five to seven days of exports, according to three industry sources.
- “The relatively contained price reaction suggests the market still expects Saudi inventories to cushion exports in the near term, but if the disruption extends beyond the five-to-seven-day inventory cushion, that could change quickly,” said Janiv Shah, oil markets analyst at Rystad.
- “Short of stopping both oil-price-affecting wars and curing the global refinery (capacity) problem, our fraternity is wondering where an inoculation against $120 Brent can be found,” said PVM analyst John Evans, pointing to Russian refinery outages and falling stockpiles.
- Oil prices surged about 9% higher last week as attacks in the Middle East escalated, with Brent rising above $100 a barrel for the first time since July and hitting its highest since May at about $110.
- In brief: Zelensky imposed 10-year sanctions on former press secretary Mendel and nine Russian citizens.
- 901/2026, was published on the Presidential Office’s website on Sept.
- Follow our coverage of the war on the @Kyivpost_official.
- Saudi state media released footage Sunday showing damage to homes and a mosque in southern Jazan province following what it said was a Houthi attack.