Saudi Pipeline Shutdown Sends Oil Prices Soaring
Oil prices have surged by around 3% to $108 per barrel after Saudi Arabia shut down its east-west pipeline in response to drone attacks. The closure has disrupted global oil supplies, leading to a significant increase in wholesale prices.
The UK's natural gas prices have also risen by approximately 5% to 209p per therm, the highest level since December 2022. This development is causing concern about the potential impact on household energy costs during the winter months.
Richard Hunter, head of markets at Interactive Investor, stated that 'the conflict in the Middle East is far from resolution' and that the inflationary impacts of elevated oil products are starting to be felt. He noted that gasoline prices in the US were a major driver of August's inflation increase, rising by 3.9% over the month.
The International Energy Agency (IEA) predicts that worldwide oil consumption will drop by 2.5 million barrels per day in 2026 compared to 2025 due to supply disruption.