Oil Prices Spike as Saudi Pipeline Outage Stokes Global Supply Fears

Oil prices surged more than 1% on Tuesday as concerns over global supplies intensified following attacks that disrupted Saudi Arabia's East-West pipeline and postponed talks between Gulf Arab states and Iran.

The Brent crude futures price rose $1.24, or 1.18%, to $106.93 a barrel at 0026 GMT, after increasing by 1% in the previous session. US West Texas Intermediate (WTI) crude futures climbed $1.29, or 1.24%, to $102.65 a barrel, following a 1.3% increase on Monday.

The disruptions were caused by Iran-backed Houthi forces in Yemen launching fresh attacks on Saudi Arabia's Khamis Mushait military airbase in the country's south. The pipeline allows Saudi Arabia to transport oil to the Red Sea and bypass the Strait of Hormuz, with the outage potentially removing as much as 4% of global oil supply from the market.

The attack followed strikes on Friday that Riyadh blamed on Iran-backed fighters in Iraq, which disrupted the East-West pipeline. Shipping concerns also deepened after commodity vessel traffic through the Strait of Hormuz fell to fewer than 10 transits a day over the weekend, compared with a 10-day average of 14.