Saudi Arabia — Oil prices rose sharply Tuesday as traders weighed mounting supply risks after attacks on Saudi Arabia’s energy infrastructure forced a key oil pipeline offline.
Brent crude futures gained $1.87, or 1.77%, to reach $107.55 a barrel at 0633 GMT. U.S. West Texas Intermediate futures rose $1.88, or 1.85%, to $103.27. Both benchmarks had already climbed more than 1% in the previous session.
The latest increase followed fresh attacks by Iran-backed Houthi forces in Yemen against Saudi Arabia on Monday. Gulf Arab states also delayed planned talks with Iran, fueling fears that the conflict could widen and place additional strain on energy supplies.
The Houthis targeted the Khamis Mushait military airbase in southern Saudi Arabia with missiles and drones. According to the report, the attack hit aircraft hangars, radar equipment, runways and ammunition depots.
The new strikes came after attacks on Saudi Arabia Friday disrupted the kingdom’s East-West pipeline. Riyadh blamed Iranian-backed fighters in Iraq for those attacks. The pipeline is strategically significant because it allows Saudi Arabia to transport crude exports around the Strait of Hormuz.
Hormuz remains a major concern for energy markets. Preliminary Kpler data showed commodity vessel traffic through the waterway dropped to four vessels Monday, compared with 10 the day before.
The decline is notable because the Strait of Hormuz carried about one-fifth of global oil supplies before the U.S.-Israeli war on Iran began on February 28.
Saudi buyers and traders cited by Reuters said Saudi Arabia could run out of oil available for export within days if the East-West pipeline remains offline. The pipeline has the capacity to redirect approximately 4 million barrels of oil per day to the Red Sea port of Yanbu, equivalent to around 4% of global supply.
The length of the outage remains unclear, keeping traders focused on whether the pipeline will return to service and whether shipping activity through Hormuz will return to normal.
The disruption is also raising wider concerns in financial markets. Higher oil prices can add to inflationary pressure and increase the likelihood that central banks will need to maintain or raise interest rates.
China was another focus for investors. Official figures showed Chinese oil throughput rose for a second straight month in August, supported by stronger fuel exports after Beijing relaxed export restrictions in mid-July.
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