Oil prices extended gains on Tuesday after Saudi Arabia's East-West pipeline stayed offline and Houthi forces struck a Saudi military airbase. Brent and WTI both climbed more than 1%, while shipping traffic through the Strait of Hormuz dropped over the weekend.
Brent and WTI climb on supply fears
Brent crude futures for November delivery gained 1.7% to $107.48 a barrel as of 2:26 a.m. ET on Tuesday. U.S. West Texas Intermediate futures for October delivery advanced 1.79% to $103.20 a barrel over the same session.
Earlier Tuesday, Reuters reported Brent rose $1.37, or 1.3%, to $107.05 a barrel at 0406 GMT. WTI rose $1.53, or 1.51%, to $102.92 a barrel over the same window. Both benchmarks had already risen more than 1% in the previous session.
Pipeline outage and fresh Houthi strikes
Saudi Arabia closed its East-West pipeline — the route that bypasses the Strait of Hormuz — after drones launched from Iraq damaged it. Riyadh blamed Friday's attack on Iranian-backed fighters in Iraq.
Houthi forces then launched a missile and drone attack on the Khamis Mushait military airbase in southern Saudi Arabia on Monday, hitting aircraft hangars, radar systems, runways and ammunition depots. Al Jazeera reported that 13 civilians were injured in the wave of strikes.
Hormuz traffic drops as tensions widen
Vessel traffic through the Strait of Hormuz fell to fewer than 10 transits a day over the weekend, down from a 10-day average of 14, a route that typically carried about one-fifth of global oil supply before the U.S.-Israeli war on Iran began on February 28. Saudi Arabia normally reroutes around 4 million barrels per day, about 4% of global supply, through the pipeline to the port of Yanbu on the Red Sea.
Iran's military said it destroyed an advanced American drone over the Strait of Hormuz. U.S. Central Command disputed an Iranian claim that the tanker El Gaia struck a naval mine in the strait, saying the vessel was struck by an Iranian missile last month. President Donald Trump said Sunday the U.S. could continue its campaign against Iran and take control of its oil.
Sources: CNBC, The Hindu (Reuters)
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