Middle East Tensions Fuel Crude Price Surge

Crude oil prices surged on Tuesday, closing up +4.44 (+4.38%) to reach a three-and-a-half-month high. The rally in crude and gasoline prices is due to supply risks, particularly in the Middle East.

Saudi Arabia shut down its key East-West pipeline last Friday as a precaution after Houthi rebel attacks. The 750-mile-long pipeline carries 7 million bpd of crude oil away from the Persian Gulf toward the Red Sea. Saudi Aramco said it is delaying oil deliveries to some European customers due to the pipeline closure.

The Houthi rebels have also targeted energy facilities in Saudi Arabia, forcing several oil facilities to halt production. This has disrupted the route used by Saudi Arabia to export most of its oil via the Red Sea.