Oil Prices Surge Amid Pipeline Shutdown and Regional Tensions
Oil prices surged more than 2% on Sunday after Saudi Arabia shut down its critical East-West pipeline, which bypasses the Strait of Hormuz.
The pipeline, capable of carrying 7 million barrels per day, has played a key role in easing oil supply disruptions triggered by the Iran war. It spans the kingdom from east to west, connecting oil-producing regions near the Persian Gulf to export terminals on its Red Sea coast.
The disruption came after drones launched from Iraq damaged the pipeline on Thursday, forcing Saudi authorities to close it indefinitely. The impact was felt globally, with U.S. West Texas Intermediate futures rising 2.3% to $102.38 per barrel and Brent crude trading 2.3% higher at $107.02 per barrel.
A diplomatic meeting between Iran and Gulf Arab states to discuss the situation in Hormuz was postponed on Sunday, citing a need for consensus. The security situation in the region remains precarious, with another tanker coming under attack resulting in a severe fire onboard.