Oil Prices Surge on Saudi Disruption and Middle East Tensions
Oil prices surged over 2% on Monday as concerns about energy supplies intensified following attacks on Saudi Arabian infrastructure and ships in the Middle East. Brent futures rose $2.72, or 2.6%, to $107.33 per barrel at 11:39 a.m. EDT (1539 GMT), while U.S. West Texas Intermediate (WTI) crude climbed $2.51, or 2.5%, to $102.56.
The price increase comes as the market remains technically overbought for more than a week, with WTI on track for its highest closes since May 19. The Saudi east-west pipeline was knocked out of service on Friday after an attack that Riyadh blamed on Iran-backed fighters in Iraq, re-routing oil shipments to the Red Sea instead of the Strait of Hormuz.
The disruption threatens up to 4% of global oil supply, with commodity vessel transits through the Strait of Hormuz falling to a single digit per day at the weekend. Yemen's Iran-aligned Houthis have tightened their control over the Bab el-Mandeb strait at the southern end of the Red Sea.