Saudi Pipeline Suspension Sparks Oil Price Surge

Oil prices surged on Tuesday, settling at $108.75 per barrel for Brent and $105.83 per barrel for West Texas Intermediate (WTI) after a Saudi Arabian pipeline suspension threatened to cut off up to 4% of global supply.

The pipeline transports 7 million barrels per day (bpd) of crude from the Red Sea hub of Yanbu, which had been attacked by Iran-backed Houthis. Traders warned that prolonged suspension could severely impact oil supplies, although Goldman Sachs estimated that repairs could take up to eight weeks or be completed 'very soon'.

The pipeline's disruption has added to supply tightness concerns, particularly in Europe, where some late-September crude cargoes from Saudi Arabia have been cancelled. However, this may lead European refiners to turn to U.S. supplies, potentially calming WTI prices in the foreseeable future.