Oil Prices Soar Past $100 Amid Pipeline Attack

Global oil prices have reached a six-month high of over $100 per barrel after drone strikes on Saudi Arabia's East-West pipeline. The attack, reportedly launched from Iraq, damaged pumping stations along the 1,200-kilometer pipeline, forcing its temporary shutdown.

The disruption has exacerbated ongoing supply chain anxieties in the Middle East, with analysts predicting a widening global oil deficit to 4.8 million barrels per day in September. Exports from Saudi Arabia's Red Sea port of Yanbu dropped to a six-month low of 1.43 million barrels per day.

Oil producers and traders have been forced to implement logistical workarounds, with shippers increasingly relying on the Omani port of Sohar to ship crude oil to Asia. China-bound shipments from Sohar rose more than tenfold between February and August, according to vessel-tracking data from the London Stock Exchange Group.

The Chinese economy has been insulated from the worst of the supply shocks due to its reduced appetite for oil, with demand projected to fall for a third consecutive year in 2026. However, the vulnerability of Middle Eastern infrastructure remains a persistent threat to global markets.