Brent crude surged as much as 3.6% to touch $109.30 a barrel, while West Texas Intermediate (WTI), the US crude benchmark, rose to around $103 a barrel.
Saudi Arabia, after markets closed on Friday, said it had halted the East-West pipeline as a precaution following attacks the previous day. The kingdom has not given any indication of when operations will resume at normal capacity.
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The pipeline, which provides a key alternative route to the Strait of Hormuz for Saudi oil exports, was shut as a precaution after attacks last week. The pipeline is expected to remain largely out of service for several weeks, according to a report citing regional officials.
The latest move comes amid heightened concerns over energy supply routes in the region. A planned meeting between Iran and several Gulf countries on Monday was delayed after Bahrain said it would skip the meeting, while Saudi Arabia also had reservations. The meeting was expected to discuss the creation of a temporary shipping lane through the Strait of Hormuz.
Traders are also monitoring developments around the Bab el-Mandeb Strait, another key chokepoint for global energy supplies, as Houthi forces make advances in the region.
According to DBS Bank, oil storage at Saudi Arabia’s Yanbu facility can support exports for around five to seven days. A prolonged disruption beyond that could lead to significant supply disruptions, raising the risk of further gains in crude prices.Crude oil prices are back above the $107-a-barrel mark after the Houthis’ further advances towards the Bab el-Mandeb strait and Saudi Arabia’s announcement of the East-West pipeline closure.
Also read: Brent Crude heads towards $108 a barrel mark after Saudi Arabia shuts key pipeline
