War Escalation Sends Oil Prices Soaring to New High

A war between Saudi Arabia and its regional rivals has escalated, causing jitters in global energy markets. Analysts warn that rising oil prices could have serious consequences for the world economy.

Saudi Arabia was initially spared from the conflict, but now finds itself under attack by Iran and its proxies in the north and south. The Houthis, who control a swath of Yemen, have broken down a ceasefire with Saudi Arabia and are attacking oil refineries near the southern border.

The East-West pipeline, which runs through Saudi Arabia, has been damaged in an attack, forcing the kingdom to shut it down as a precaution. This could lead to a further drop in Saudi exports and production, which fell to the lowest level in more than three decades in August.

Brent crude has tested $110 a barrel recently, and gasoline inventories are at 10-year lows. Refiners are making huge profits turning oil into products like gasoline, but analysts warn of a risk that prices could become 'trapped in an upward spiral.'