Oil prices rise as Saudi pipeline outage, fresh attacks raise supply concerns
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
Sept 15 : Oil prices rose on Tuesday as concerns over supply disruptions persisted after attacks on Saudi Arabian energy infrastructure left the kingdom's East-West pipeline offline and cast doubt on efforts to ease shipping risks in the Gulf.
Brent crude futures rose $1.24, or 1.18 per cent, to $106.93 a barrel at 0026 GMT, after climbing 1 per cent previously, while U.S. West Texas Intermediate futures were up $1.29, or 1.24 per cent, at $102.65 a barrel, after gaining 1.3 per cent in the previous session.
Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, while Gulf Arab states postponed planned discussions with Iran, fuelling concerns that the Middle East conflict could widen and disrupt global oil supplies.
The Houthis carried out a missile and drone attack on the Khamis Mushait military airbase in southern Saudi Arabia, hitting aircraft hangars, radar systems, runways and ammunition depots in retaliation for Saudi strikes in Yemen.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
This followed attacks on Friday on Saudi Arabia, which Riyadh blamed on Iranian-backed fighters in Iraq, that disrupted the country's East-West pipeline, which allows oil exports to bypass the blockaded Strait of Hormuz.
"Oil traders are treating every fresh attack or infrastructure hit as incremental supply risk, while staying highly sensitive to any sign that the East-West pipeline or Hormuz flows could normalise," said Tim Waterer, chief market analyst at KCM Trade.
Commodity vessel traffic through the Strait of Hormuz dropped to fewer than 10 transits a day over the weekend, from a 10-day average of 14, raising concerns over a route that typically carried about one-fifth of global oil supplies before the U.S.-Israeli war on Iran began on February 28.
Saudi Arabia could begin to exhaust oil available for export within days unless it restores operations on the East-West pipeline, potentially removing as much as 4 per cent of global oil supply from the market, according to Saudi buyers and traders.
The world's biggest exporter has used the pipeline to reroute around 4 million barrels per day — around 4 per cent of global supply — to the port of Yanbu on the Red Sea.
"The big question for traders right now is the duration of the East-West outage. Any prolonged disruption and the associated supply loss could easily push prices to the next level higher," Waterer added.
Separately, President Volodymyr Zelenskiy said on Monday that Kyiv was ready to support a U.S. proposal for a Russia-Ukraine ceasefire on energy sites only if Washington could ensure Moscow was genuinely ready to end its war on Ukraine.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app