Oil prices rose more than 2 per cent on Tuesday as attacks on Saudi energy infrastructure disrupted the kingdom’s East-West oil pipeline, heightening concerns about the security and availability of global crude supplies.
Brent crude futures gained $2.50, or 2.37 per cent, to $108.18 a barrel by 0813 GMT, while US West Texas Intermediate (WTI) crude rose $2.46, or 2.43 per cent, to $103.85 a barrel.
The latest price increase followed renewed attacks by Iran-backed Houthi forces in Yemen on Saudi Arabia and the postponement of planned talks between Gulf Arab states and Iran.
Analysts said the fresh attacks had increased uncertainty over the duration and severity of the wider regional conflict and its potential impact on energy infrastructure and transport routes.
“Fresh attacks by the Houthis targeting Saudi Arabia may be influencing oil market investors’ expectations about the severity and duration of the conflict,” Hamad Hussain, senior climate and commodities economist at Capital Economics, told Reuters.
The Houthis said on Monday that they had launched dozens of missiles and drones at a military airbase in Khamis Mushait in southern Saudi Arabia.
According to the group, the attacks targeted aircraft hangars, radar systems, runways and ammunition depots in retaliation for Saudi airstrikes in Yemen.
The latest attacks followed strikes on Saudi Arabia on Friday that Riyadh blamed on Iranian-backed fighters in Iraq. The attacks disrupted the East-West pipeline, a key route that enables Saudi Arabia to transport crude to its western coast and export it without relying entirely on the Strait of Hormuz.
The disruption has heightened concerns over a major alternative route for Saudi oil exports at a time when shipping through the strategic waterway has been severely affected.
The Strait of Hormuz previously handled about one-fifth of global oil supplies, making any prolonged disruption a major concern for energy markets.
Goldman Sachs said the attacks on energy infrastructure represented a significant escalation of the conflict and increased the possibility of Brent crude rising above $120 a barrel.
The investment bank based its assessment on a scenario in which average Gulf oil production remains about four million barrels per day below pre-war levels in 2027.
Shipping data also pointed to growing disruption around the Strait of Hormuz. Preliminary data from Kpler showed that commodity vessel traffic through the waterway fell to four vessels on Monday, compared with 10 the previous day.
The decline has added to concerns over the ability of oil producers and traders to maintain normal export flows amid continuing military tensions in the region.
Market participants are now closely monitoring developments around Saudi energy infrastructure, Yemen and the Strait of Hormuz for signs of further disruption.
A prolonged outage of the East-West pipeline, combined with reduced shipping through Hormuz and continued attacks on regional energy facilities, could place additional upward pressure on crude prices and raise concerns over fuel costs globally.
