Saudi Strikes Send Oil Prices Soaring Amid Strait of Hormuz Tensions
Oil prices surged more than 2% on Monday following new strikes on Saudi Arabia and attacks on ships in the Strait of Hormuz, exacerbating supply concerns. The disruption to global oil supplies has seen Brent crude futures rise $2.90, or 2.77%, to $107.51 per barrel as of 2313 GMT, while WTI futures rose $2.27, or 2.27%, to $102.32 per barrel.
The Houthi strikes on Saudi Arabia's southern Jazan province caused damage to homes and a mosque, according to state media. The group also claimed responsibility for hitting a Saudi military base in a neighboring province. In the Strait of Hormuz, a vessel was struck by a projectile, causing a fire and forcing the crew to evacuate.
Saudi Arabia's East-West oil pipeline, which was shut down on Friday after a drone strike from Iraq, threatens up to 4% of global oil supply. The loss of this pipeline is compounded by the Houthi control over the Bab el-Mandeb Strait, another key oil transit lane that has been shipping 4-5% of global supply in recent months.
IG market analyst Tony Sycamore warned that unless talks in Oman produce something operational or the East-West pipeline is brought back online quickly, crude oil prices may continue to rise towards $119.48, a high reached in early March.