Oil Prices Soar as Saudi Attacks Spark Supply Fears
Oil prices surged on Tuesday after attacks on Saudi Arabian energy infrastructure left its East-West pipeline offline, raising fears of supply disruptions. Brent crude futures rose $2.5 to $108.18 a barrel, while US West Texas Intermediate futures gained $2.46 to $103.85 per barrel.
The attacks damaged the critical East-West pipeline, which is an alternative route for Saudi crude exports when the Strait of Hormuz is threatened. The disruption comes amid heightened tensions in the Middle East, with Iran's military claiming it destroyed an advanced American drone over the strait on Tuesday.
Oil prices and Treasury yields have entered a tight lockstep, with the one-month rolling correlation between front-month West Texas Intermediate crude and the 10-year Treasury yield reaching 0.96. Industry veterans say this relationship means another leg higher in oil could reverberate across financial markets through higher inflation expectations and elevated borrowing costs.