Brent Crude Surges Above $107 as Middle East Tensions Escalate
Oil prices surged to above $107 a barrel on Monday, driven by fears of supply disruptions in the Middle East. Brent crude for November delivery rose 2.8% to $107.54 a barrel, while US benchmark West Texas Intermediate (WTI) for October gained 2.3% to $102.34.
The latest rally is largely due to concerns over a supply shock rather than an increase in global oil demand. The temporary shutdown of Saudi Arabia's East-West pipeline following drone attacks has added to these fears, as it provides an alternative route to transport crude to the Red Sea and bypass the Strait of Hormuz.
A significant share of global crude shipments passes through the strategically important waterway, making any threat to maritime traffic particularly sensitive for energy markets. The latest incident comes against the backdrop of the broader US-Iran conflict and continued Houthi activity around the Red Sea and Bab el-Mandeb.