Oil Prices Surge as Saudi Pipeline Outage and Libya Shutdowns Fuel Supply Fears

Oil prices surged on Tuesday as supply fears mounted due to Saudi Arabia's East-West pipeline outage and Libya's shutdown of multiple oil fields. The pipeline, which runs the full length of the Arabian Peninsula, was forced to close last week after drone strikes. Saudi Aramco has since pushed back oil deliveries to some European buyers this month, according to a Bloomberg report.

Investors are closely watching how long the pipeline will stay shut, with US Energy Secretary Chris Wright stating that the outage 'will be measured in days' and reiterated that the pipeline could resume operations 'very soon.' However, Saudi Arabia has given no timeline for restoring flows, with UK officials believing the shutdown could stretch to six weeks.

The situation was further complicated by Libya's authorities shutting down multiple oil fields and weighing a force majeure declaration after the Hamada-Zawiya pipeline was closed. Brent crude, the global benchmark, closed almost 3% higher near $109 a barrel in Tuesday's trade before settling around $108 a barrel.