Oil jumps more than 2% after new attacks on Saudi Arabia and the Strait of Hormuz - Sarmad
Oil prices jumped more than two percent on Monday, as new Houthi attacks on Saudi Arabia and Iranian strikes on ships in the Gulf exacerbated concerns about supplies following the closure of a major Saudi oil pipeline.
By 2313 GMT, Brent crude futures rose $2.90, or 2.77 percent, to $107.51 a barrel. West Texas Intermediate crude futures gained $2.27, or 2.27 percent, to $102.32 a barrel. Prices had initially risen by more than three percent at the market open.
Saudi state media published a video on Sunday showing damage to homes and a mosque in the southern province of Jazan, which it described as the result of a Houthi attack. The Houthis said they also struck a Saudi military base in a neighboring province.
The UK Maritime Trade Operations agency said on Sunday that a ship in the Strait of Hormuz was hit by a projectile, causing a fire and forcing the crew to evacuate.
Iran stated that one person was killed and four crew members were injured on an Iranian commercial vessel attacked off its coast.
Oil prices were expected to rise on Monday amid growing concerns over supply risks from Saudi Arabia, the world’s largest oil exporter, after its east-west pipeline was shut down on Friday following a drone attack launched from Iraq.
The disruption to the pipeline, which had helped Saudi Arabia redirect its exports away from the Strait of Hormuz, threatens up to four percent of global oil supplies.
Meanwhile, the Iran-backed Houthis in Yemen reached the strategic island of Perim on Friday, a move aimed at tightening their control over the Bab al-Mandab strait, another key oil transit route that carried between four and five percent of global supplies in recent months.
Oil prices rose eight percent during the week due to these disruptions, surpassing the $100-a-barrel mark for the first time since July.
Tony Sycamore, market analyst at IG, wrote in a note on Sunday, “Looking ahead, unless talks this week in Oman yield practical results, or the east-west pipeline is quickly restarted, the risk is that crude continues its gains toward the high recorded in early March at $119.48.”
However, Omani Foreign Minister Badr Al Busaidi said on Sunday that a meeting scheduled for Monday in the Sultanate of Oman between Gulf states and Iran to discuss the Strait of Hormuz has been postponed.
No peace talks have been held in this war, launched by the United States and Israel six months ago, since the collapse of a temporary agreement in June.
