Oil Prices Rise Above $108 as Saudi Pipeline Stays Offline

Post by : Saif

Oil prices moved higher on Tuesday as attacks on Saudi energy infrastructure and the continued shutdown of the kingdom’s East-West pipeline increased concerns about global crude supplies.

Brent crude futures gained $2.50, or 2.37%, to reach $108.18 a barrel, while US West Texas Intermediate futures rose $2.46, or 2.43%, to $103.85 a barrel.

Market concerns have grown because Saudi Arabia’s East-West pipeline remains offline after an attack on Friday. The pipeline provides an important alternative route for exporting crude without using the Strait of Hormuz.

Houthi Attacks Add Pressure

Iran-backed Houthi forces in Yemen launched another series of attacks against Saudi Arabia on Monday. The group said it fired dozens of missiles and drones at a military airbase in Khamis Mushait in southern Saudi Arabia.

The Houthis said the operation targeted aircraft hangars, radar systems, runways and ammunition facilities. They described the attacks as retaliation for Saudi airstrikes in Yemen.

The latest strikes have added to concerns among oil traders about the duration and severity of the wider regional conflict.

East-West Pipeline Remains Offline

Friday’s attack disrupted Saudi Arabia’s East-West pipeline, which helps transport crude toward the Red Sea and allows exports to avoid the Strait of Hormuz.

Saudi crude exports could face increasing pressure if the pipeline remains closed for an extended period. Buyers and traders have warned that available crude stocks for export could be exhausted within days if operations do not resume.

The disruption could put as much as 4% of global oil supply at risk, increasing pressure on international energy markets.

Read more: Oil Prices Slip as US–Iran Talks Reduce Tension

Repair Timeline Remains Uncertain

Goldman Sachs said the damage could affect around 2 million barrels per day of recent Yanbu exports. Estimates for repairing the pipeline range from a quick restoration to as long as eight weeks.

The investment bank said the attacks represent a significant escalation in the conflict and have increased the possibility of Brent crude moving above $120 a barrel.

If Gulf oil production remains well below pre-war levels in 2027, prices could face further upward pressure.

Strait of Hormuz Traffic Drops Sharply

Shipping activity through the Strait of Hormuz has also declined. Preliminary data showed only four commodity vessels passed through the strategic waterway on Monday, compared with 10 the previous day.

The Strait previously carried around one-fifth of global oil supplies before the US-Israeli war with Iran began on February 28.

Analysts warn that if the pipeline remains closed for several weeks and oil flows through Hormuz do not increase, Brent crude could move toward $130 a barrel.

China Reports Higher Oil Throughput

China provided a separate development for the global oil market. Official data showed that Chinese refinery oil throughput increased for a second consecutive month in August.

The rise was supported by higher fuel exports after Beijing eased restrictions in mid-July. Stronger Chinese refinery activity could influence global demand and supply conditions as oil markets face growing uncertainty from disruptions in the Middle East.

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