Middle East Conflict Drives Oil Prices Above $100

The global oil market is under pressure due to rising tensions in the Middle East. Crude prices surged over 1% on Tuesday after attacks hit Saudi Arabia, disrupted its East-West pipeline, and delayed talks between Iran and Gulf states.

The East-West pipeline, which can carry around 4 million barrels per day, has been offline since the attack, raising concerns about a prolonged reduction in available crude supplies. The pipeline is crucial for Saudi Arabia to bypass the Strait of Hormuz, one of the world's most important energy chokepoints.

Brent Crude futures rose $1.24, or 1.188%, to $106.93 a barrel, while US West Texas Intermediate (WTI) gained $1.29, or 1.24%, to $102.65 in early trading. The market is particularly focused on the duration of the Saudi pipeline outage and its impact on global oil supplies.

The Strait of Hormuz traffic has also declined sharply, with only four commodity vessels crossing the waterway on Monday, compared to around 10 transits per day before the conflict began. The decline in shipping activity through the strait raises concerns about the global energy supply chain and its potential impact on inflation.