Oil prices surged over 4% to a 16-week high on Monday due to new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East, raising concerns about energy supply. Brent futures climbed $4.68 to $109.29 per barrel, while U.S. West Texas Intermediate (WTI) rose $4.21 to $104.26. Both benchmarks are poised for their highest closes since mid-May.
The situation escalated as Yemen’s Iran-backed Houthis launched attacks on Saudi military targets, including airbases, further complicating the already tense geopolitical landscape. A recent strike on Saudi Arabia’s east-west pipeline, attributed to Iran-backed fighters, has threatened up to 4% of global oil supply by disrupting a key route for oil shipments.
With the pipeline out of service, the Red Sea port of Yanbu may rely on limited storage for exports, raising concerns about supply sustainability. Analysts suggest that while current price reactions are moderate, prolonged disruptions could lead to significant price increases. Meanwhile, U.S. diesel futures approached record highs, exacerbating global fuel shortages amid ongoing conflicts, including Ukraine’s attacks on Russian refineries.
