Oil Prices Surge as Houthi Strikes and Pipeline Closure Raise Supply Concerns

Oil prices surged more than 2% on September 14 after new strikes by the Houthi rebels in Saudi Arabia and attacks on ships in the Strait of Hormuz heightened supply concerns. The East-West oil pipeline in Saudi Arabia, which was shut down by a drone strike from Iraq on September 11, threatens up to 4% of global oil supply.

The closure of the pipeline, combined with Houthi control over key oil transit lanes, has led to rising crude prices. Brent crude futures rose $2.90 (2.77%) to $107.51 per barrel, while West Texas Intermediate futures rose $2.27 (2.27%) to $102.32 per barrel.

IG market analyst Tony Sycamore warned that unless the talks in Oman produce a solution or the East-West pipeline is quickly brought back online, crude oil prices may continue to rise towards their March high of $119.48.