Saudi Pipeline Closure Sends Oil Prices Soaring Amid US-Iran Conflict Fears
A critical pipeline in Saudi Arabia has been closed following a drone strike, causing oil prices to surge globally. The East-West link, known as the Petroline, transports crude oil from production facilities on the Persian Gulf side of the country across the Arabian Peninsula to Yanbu on its Red Sea coast.
The precautionary closure has seen the futures contract for benchmark Brent crude briefly hit $110 a barrel before retreating slightly to $108.42 a barrel, up almost 4%, amid fears that the disruption to oil exports out of the Gulf due to the US-Iran conflict is set to worsen.
American crude for October delivery jumped by more than $3.30 a barrel to $103 and was trading at $103.37 a barrel in mid-afternoon trade in London, according to data.
The uncertainty about how long the pipeline will be offline is driving the 'knock-on consequences' for global supply and energy prices, analysts at Lloyds Bank said.