Oil prices rise nearly 3% on Monday

Oil prices rose nearly 3 per cent on Monday as fresh attacks on Saudi energy infrastructure and vessels in the Gulf heightened concerns over global supply, following the shutdown of a key Saudi oil pipeline.

Brent crude futures gained $2.93, or 2.8 per cent, to $107.54 a barrel at 0700 GMT, while US West Texas Intermediate (WTI) crude rose $2.88, or 2.9 per cent, to $102.93.

Saudi Arabia’s East-West pipeline was temporarily shut following a drone attack, disrupting a key route used to transport oil to the Red Sea while avoiding the Strait of Hormuz. The outage could put up to 4 per cent of global oil supply at risk.

The port of Yanbu has enough inventories to cover only five to seven days of exports, according to industry sources.

Supply concerns were further amplified after a vessel in the Strait of Hormuz was hit by a projectile, causing a fire and forcing its crew to evacuate. Iran also reported casualties after an Iranian commercial vessel was struck off its coast.

The Iran-aligned Houthis have also moved to strengthen their position around the Bab el-Mandeb Strait, another major oil transit route that has carried around 4 per cent to 5 per cent of global supply in recent months.

Oil prices surged about 8 per cent last week, rising above $100 a barrel for the first time since July, amid mounting disruptions. A planned Monday meeting between Gulf countries and Iran to discuss the Strait of Hormuz was also postponed, according to Oman’s foreign minister.

Attribution: Reuters