Oil Prices Surge on Saudi Pipeline Strike and Middle East Tensions

Oil prices surged over 2% on Monday after a wave of attacks on Saudi Arabian energy infrastructure and ships in the Middle East. The strikes, attributed to Yemen's Iran-backed Houthis, targeted a military airbase in southern Saudi Arabia and knocked out the country's east-west pipeline, which accounts for up to 4% of global oil supply.

The pipeline disruption threatens to exacerbate already tight energy markets, with commodity vessel transits through the Strait of Hormuz plummeting to single-digit levels. Brent futures rose $1.07, or 1%, to settle at $105.68 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by $1.34, or 1.3%, to settle at $101.39.

U.S. President Donald Trump's statement that Iran wanted to reach a deal with Washington tempered the gains, but concerns about energy supplies and global oil prices remain high. The Russia-Ukraine conflict also contributed to the price increase, as investors bet on further rate hikes from the U.S. Federal Reserve, which could reduce economic growth and demand for energy.