Middle East Conflict Escalates, Oil Prices Soar Amid Pipeline Disruption

Oil traders are bracing for further price increases as the conflict in the Middle East intensifies. New strikes on Saudi Arabia and ships in the Gulf have disrupted global energy supplies, with oil prices surging above $100 last week.

The Houthis, a Yemeni rebel group, claimed to have struck a Saudi military base and captured Perim Island, which lies at the mouth of the Red Sea. The attack on Friday knocked out the 1,200-km east-west pipeline across the Arabian Peninsula, which has served as the main route for global supplies of Middle East oil.

Saudi Arabia's oil exports could be jeopardized if the pipeline remains shut, with traders estimating that up to 4% of global oil supply is at risk. The disruption comes on top of millions of barrels a day already lost due to disruptions in the Strait of Hormuz.