Houthi Strikes Send Oil Prices Surging Over 2 Percent

Oil prices surged more than 2 percent on Monday after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf exacerbated supply concerns following the closure of a key Saudi oil pipeline. The East-West oil pipeline, which helps re-route exports avoiding the Strait of Hormuz, was shut down by a drone strike that originated in Iraq.

The loss of the pipeline threatens up to 4 percent of global oil supply, and with Yemen's Iran-aligned Houthis having reached the strategic island of Perim on Friday, control over another key oil transit lane, the Bab el-Mandeb Strait, is tightening. This strait has been shipping 4-5 percent of global supply in recent months.

Oil prices had initially risen more than 3 percent at market open before Brent crude futures rose $2.90, or 2.77 percent, to $107.51 per barrel as of 23:13 GMT. WTI futures rose $2.27, or 2.27 percent, to $102.32 per barrel.

Analyst Tony Sycamore noted that unless this week's talks in Oman produce something operational, or the East-West pipeline is brought back online quickly, crude oil could extend its gains toward the $119.48 high of early March.