Brent crude pushed above $107 a barrel Tuesday after fresh Houthi attacks and a pipeline outage cut into Saudi Arabia's export capacity. The kingdom's East-West pipeline remains offline following Friday's strikes, and stalled Iran-Gulf shipping talks are removing hopes of a quick fix to the supply squeeze.
Brent crude rose $1.67, or 1.58%, to $107.35 a barrel at 1002 GMT on Tuesday, while U.S. West Texas Intermediate climbed $2.14, or 2.11%, to $103.53 a barrel. The moves came after attacks on Saudi Arabian energy infrastructure knocked the country's East-West pipeline offline, raising fears that repairs could take longer than expected.
Houthi Strikes Widen the Conflict
Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, firing dozens of missiles and drones at a military air base in Khamis Mushait, targeting aircraft hangars, radar systems, runways and ammunition depots. Riyadh had already blamed Friday's earlier attack, which disrupted the East-West pipeline, on Iranian-backed fighters in Iraq. That pipeline lets Saudi oil bypass the blockaded Strait of Hormuz, through which about a fifth of global oil supplies previously passed.
Saudi Arabia could exhaust crude available for export within days unless the pipeline resumes operations, buyers and traders said, with the strike threatening up to 4% of global oil supply. The line normally carries roughly 4-5 million barrels per day to the Red Sea, making it one of the few alternatives to the Strait of Hormuz.
Diplomatic Progress Stalls
Gulf Arab states postponed planned discussions with Iran, and the postponement of talks over a potential temporary shipping arrangement through the Strait of Hormuz has faded hopes for a near-term easing of the disruption. Commodity vessel traffic through the Strait of Hormuz dropped to four on Monday, down from 10 a day earlier, according to preliminary data from Kpler.
Traders are now watching tomorrow's FOMC rate decision and Thursday's US jobless claims figures, alongside further developments in the Middle East. Analysts at Investinglive expect oil to remain supported unless there is meaningful progress toward reopening Hormuz or improving US-Iran relations.
Sources: Reuters, Investinglive
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