Saudi Pipeline Disruption Sends Oil Prices Soaring
Oil prices surged on Tuesday after attacks on Saudi Arabian energy infrastructure left the kingdom's crucial pipeline offline, raising concerns about supply disruptions. Brent crude futures rose to a session high of $108.43 per barrel, while U.S. West Texas Intermediate futures reached as far as $104.21 earlier in the day.
Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, targeting aircraft hangars, radar systems, runways, and ammunition depots. This follows a series of recent attacks that disrupted the country's East-West pipeline, which allows oil exports to bypass the Strait of Hormuz.
Saudi Arabia could exhaust crude available for export within days unless the East-West pipeline resumes operations, according to buyers and traders. The pipeline strike threatened up to 4% of global oil supply, with Goldman Sachs predicting that Brent crude prices could rise above $120 per barrel if average Gulf oil output remains below pre-war levels.
Commodity vessel traffic through the Strait of Hormuz dropped on Monday to four, down from ten a day earlier, raising concerns about a route that carried about a fifth of global oil supplies before the conflict escalated. Half of Russia's six top diesel-producing refineries were forced to significantly cut back or completely halt output in September due to damage sustained in drone attacks.