Brent crude at $107 per barrel following new strikes on Saudi Arabia, Strait of Hormuz

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Models of oil barrels and a pump jack are displayed in front of a rising stock graph and "$100" in this illustration taken on Feb 24, 2022. — Reuters/File
Models of oil barrels and a pump jack are displayed in front of a rising stock graph and "$100" in this illustration taken on Feb 24, 2022. — Reuters/File

Oil prices rose about three per cent on Monday, after new strikes on Saudi Arabian energy and civilian infrastructure and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline.

Brent crude futures climbed $2.93, or 2.8pc, to $107.54 per barrel at 0700 GMT (12pm PKT). WTI futures gained $2.88, or 2.9pc, to $102.93 per barrel.

“This follows a step-up in attacks on Saudi Arabian energy infrastructure, including targeting the crucial East-West pipeline,” said ING commodity strategists, though they noted it was unclear how severe any potential damage was or how long the pipeline would be out of action.

Saudi Arabia’s East-West oil pipeline was temporarily shut following a drone attack, according to Saudi officials. The shutdown of the pipeline, which helps Saudi Arabia avoid the Strait of Hormuz and re-route its exports, threatens up to 4pc of global oil supply.

With the pipeline out of service, the port of Yanbu on the Red Sea has enough inventory to cover just five to seven days of exports, according to three industry sources familiar with Saudi Arabia’s exports.

Saudi Arabian state media on Sunday released video footage of damage to homes and a mosque from what it said was a Houthi attack on the country’s southern Jazan province. The Houthis said they had also struck a Saudi military base in a neighbouring province.

Meanwhile, a vessel in the Strait of Hormuz was struck by a projectile, causing a fire and forcing the crew to evacuate, the British maritime security agency UKMTO said on Sunday.

Iran said one person was killed and four crew wounded aboard an Iranian commercial vessel struck off its coast.

Yemen’s Houthis reached the strategic island of Perim on Friday, moving to tighten their control over the Bab el-Mandeb strait, another key oil transit lane that has been carrying 4pc to 5pc of global supply in recent months.

Oil surged 8pc higher last week due to the disruptions, rising above $100 for the first time since July.

Omani Foreign Minister Badr Albusaidi said on X on Sunday that a scheduled Monday meeting in Oman between Gulf countries and Iran to discuss the Strait of Hormuz had been postponed.

No peace talks have been held on the war, launched six months ago by the United States and Israel, since an interim agreement in June collapsed.

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