Oil prices up over 3% following new strikes on Saudi Arabia, Strait of Hormuz

Oil prices jumped more than three per cent on Sept. 14, after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline.

Brent crude futures rose US$3.21, or 3.1 per cent, to US$107.82 per barrel as at 3:40am GMT.

West Texas Intermediate futures rose US$3.17, or 3.2 per cent, to US$103.22 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.

They noted, however, that 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 reroute its exports, threatens up to four per cent of global oil supply.

With the pipeline out of service, the western Saudi Arabian city of Yanbu has enough inventory to cover just five to seven days of exports, according to three industry sources familiar with the exports of Saudi Arabia.

Saudi Arabian state media on Sept. 13 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.

Meanwhile, a vessel in the Strait of Hormuz was struck by a projectile, causing a fire and forcing the crew to be evacuated, maritime security agency United Kingdom Maritime Trade Operations said on Sept. 13.

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

Yemen’s Iran-aligned Houthis reached the strategic island of Perim on Sept. 11, moving to tighten their control over the Bab el-Mandeb Strait, another key oil transit lane that has been shipping four per cent to five per cent of global supply in recent months.

Oil surged eight per cent higher on the week owing to the disruptions, rising above US$100 for the first time since July.

Omani Foreign Minister Badr Albusaidi said on social media platform X later on Sept. 13, however, that a scheduled Sept. 14 meeting in Oman between Gulf countries and Iran to discuss the Strait of Hormuz had been postponed.

No peace talks have been held over the war, launched six months ago by the United States and Israel, since an interim agreement in June collapsed after a few weeks. – Reuters

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