Oil prices jumped more than 2% on Monday as fresh attacks in Saudi Arabia and the Gulf added to growing concerns over global supply, with Brent crude rising above US$107 a barrel.
Brent crude futures gained US$2.90 or 2.77% to US$107.51 a barrel by 2313 GMT, while US West Texas Intermediate crude rose US$2.27 or 2.27% to US$102.32. Both contracts had climbed more than 3% earlier in the session.
Supply concerns have intensified after Saudi Arabia’s East-West oil pipeline was shut following a drone strike on Friday. The pipeline allows Saudi Arabia to reroute exports and avoid the Strait of Hormuz, with its disruption threatening up to 4% of global oil supply.
The latest price jump came after Saudi state media reported damage to homes and a mosque in the southern Jazan province following what it said was a Houthi attack. The Houthis also said they had struck a Saudi military base in a neighbouring province.
Shipping risks are also mounting around the Strait of Hormuz. A vessel was struck by a projectile in the waterway on Sunday, causing a fire and forcing its crew to evacuate, according to the British maritime security agency UKMTO.
Meanwhile, Iran said one person was killed and four crew members were wounded after an Iranian commercial vessel was struck off its coast.
The Houthis had also reached Yemen’s strategic Perim island on Friday, raising concerns over the Bab el-Mandeb Strait, another key oil transit route that has carried around 4% to 5% of global supply in recent months.
Oil prices had already risen about 8% last week, moving above US$100 for the first time since July.
IG market analyst Tony Sycamore said, “Looking ahead, 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.”
However, a planned Monday meeting in Oman between Gulf countries and Iran to discuss the Strait of Hormuz has been postponed, Omani Foreign Minister Badr Albusaidi said.
The latest developments add further uncertainty to an oil market already dealing with disruptions across key shipping routes and production infrastructure.
Reuters
