Oil Prices Plummet Amid Ongoing Conflict and Supply Constraints

Oil prices plummeted by over 7% on Monday after Washington and Tehran paused military strikes, but relief was short-lived as Houthi forces attacked Saudi Aramco facilities at Jizan and Yanbu.

The attacks threaten the only remaining export corridor for Saudi Arabia, which has been rerouting all its exports through this route since Iran closed the Strait of Hormuz in February.

Despite a fragile halt to hostilities, analysts warn that structural supply constraints cannot be quickly resolved by diplomacy alone. The Strait of Hormuz remains effectively closed, with fewer than 10 commodity vessels transiting it per day compared to roughly 100 per day before the conflict began.

The Saudi East-West Pipeline, which became critical infrastructure overnight, was also targeted in Saturday's attack. Houthi forces fired ballistic missiles and drones at Saudi Aramco facilities in Jizan and Yanbu, causing a fire at the Jizan refinery.