Saudi Pipeline Closure Sparks Global Oil Price Surge
Global oil and gas prices are rising sharply after Saudi Arabia closed its east-west pipeline due to drone attacks. The move has disrupted global supply chains, causing a surge in wholesale prices. Brent crude oil is up around 3% to $108 (£80) per barrel, while UK natural gas prices have risen by about 5% to 209p per therm, hitting their highest level since December 2022.
The Saudi foreign ministry blamed the attacks on drones from Iraq, which its government has pledged to investigate. Richard Hunter, head of markets at Interactive Investor, noted that the pipeline's closure would exacerbate supply constraints and contribute to inflationary pressures. He pointed out that gasoline was a major driver of August's US inflation increase.
The International Energy Agency (IEA) predicts a 2.5 million barrels per day drop in global oil consumption by 2026 compared to 2025 due to the ongoing supply disruptions.