Brent crude jumped roughly 3% at the open and pushed above $107 a barrel after new strikes on Saudi Arabia, attacks on vessels near the Strait of Hormuz and the shutdown of Saudi Arabia's East-West pipeline. The pipeline's closure could put up to 4% of global oil supply at risk, and a planned Gulf-Iran meeting in Oman has been postponed as tensions build.
Brent breaks above $107 on new attacks
Brent jumped around 3% at opening as escalating geopolitical tensions raised concerns over global supply. The benchmark moved above $107 a barrel after new strikes on Saudi Arabia, attacks on vessels near the Strait of Hormuz and the shutdown of Saudi Arabia's East-West pipeline.
That pipeline is a key export route that lets crude oil bypass the Strait of Hormuz, and its closure could put up to 4% of global oil supply at risk. At the same time, rising risks around the Houthis near the Bab el-Mandeb Strait have added concern over another important transit route. A planned Gulf-Iran meeting in Oman has been postponed, so markets are likely to stay focused on the risk of further disruption and on whether the East-West pipeline can be restored quickly.
Prices extend gains into the new week
By Monday morning, oil had moved back above $108 a barrel following attacks on key pipelines in the Middle East and the postponement of the Gulf meeting. The move builds on last week's advance, when oil gained around 10% even as front-end government bond yields in the US and Europe rose by about 25 basis points.
That combination weighed on equities only modestly. The broader market ended around 1% lower for the week, with cyclical stocks outperforming defensives and volatility staying compressed. Still, Brent was trading around the $107 mark as of Friday's session, with little sign that Middle East tensions are easing.
Source: ActionForex
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