Oil Prices Jump More Than 2% After Saudi Pipeline Drone Strike
Oil Prices Surge on Pipeline Attack
Oil prices jumped more than 2% on Monday after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline. [2] Brent crude futures rose $2.90, or 2.77%, to $107.51 per barrel as of 2313 GMT. [2] WTI futures rose $2.27, or 2.27%, to $102.32 per barrel. [2] Prices had initially risen more than 3% at market open. [2] Brent crude rose as much as 3% to $107.6 per barrel while WTI climbed to $102.32 following the Friday drone attack on the pipeline. [1] Oil prices had been expected to rise on Monday amid growing concerns about risks to supply from Saudi Arabia, the world's largest oil exporter, whose East-West oil pipeline was shut on Friday by a drone strike that originated in Iraq. [2] Oil surged 8% higher on the week due to the disruptions, rising above $100 for the first time since July. [2]
Details of the Saudi Pipeline Strike
Saudi Arabian state media on Sunday released video footage of damage to homes and a mosque from what it said was a Houthi attack on the country's southern Jazan province. [2] The Houthis said they had also struck a Saudi military base in a neighbouring province. [2] Saudi Arabia opplyste fredag kveld at de hadde stengt den såkalte øst-vest-rørledningen etter et angrep dagen før. [1] The pipeline, with capacity of 7 million barrels per day, allows Saudi Arabia to export oil to the Red Sea port of Yanbu without using the Strait of Hormuz. [1] The loss of the pipeline, which helped Saudi Arabia re-route its exports avoiding the Strait of Hormuz, threatens up to 4% of global oil supply. [2] Oljerørledningen ender i havnebyen Yanbu ved Rødehavet. [1] Saudi storage at Yanbu can sustain exports for five to seven days before major disruptions occur, according to analysts. [1] Lagrene i byen kan opprettholde eksporten i fem til syv dager, men utover det ville det føre til «enorme forstyrrelser», fastslår Suvro Sarkar, analysesjef i DBS Bank Ltd., overfor Bloomberg. [1]
Houthi Advances in Yemen
Houthi forces seized the Yemeni port of Mokha and the strategic island of Perim in the Bab el-Mandeb Strait last week, tightening control over another key oil route. [1] Houthi-militsen har siden starten av september ført en offensiv langs Jemens vestkyst. [1] På slutten av forrige uke tok de over havnebyen Mokka fra regjeringsstyrkene. [1] Dagen etter kom det meldinger om at hadde tatt over øya Perim i Bab el-Mandeb-stredet. [1] Meanwhile, Yemen's Iran-aligned Houthis had reached the strategic island of Perim on Friday, moving to tighten their control over the Bab el-Mandeb Strait, another key oil transit lane that has been shipping 4-5% of global supply in recent months. [2] A vessel in the Strait of Hormuz was struck by a projectile, causing a fire and forcing the crew to be evacuated, the British maritime security agency UKMTO said on Sunday. [2] Iran said one person was killed and four crew wounded aboard an Iranian commercial vessel struck off its coast. [2]
Analyst Warnings on Further Price Rises
In påvente av en reparasjon kan oljeprisen komme opp på 120 dollar fatet, ifølge Sarkar. [1] Oljeprisen kan komme opp på 120 dollar fatet, ifølge analytiker. [1] "Looking ahead, unless this week's talks in Oman produce something operational — or the East-West pipeline is brought back online quickly — the risk is that crude oil continues to extend its gains toward the $119.48 high of early March," IG market analyst Tony Sycamore said in a note on Sunday. [2] Alt kommer an på hvor lenge det varer, sier June Goh, analytiker i Sparta Commodities, til nyhetsbyrået Bloomberg. [1]
Postponed Gulf-Iran Talks
A planned meeting between Iran and Gulf states on Strait of Hormuz security was postponed, with Bahrain citing the pipeline attack as a reason. [1] Et planlagt møte mellom Iran og flere andre golfstater, som skulle vært avholdt mandag, har også blitt utsatt, opplyste Omans utenriksminister Badr Albusaidi, ifølge Bloomberg. [1] Bahrain har sagt de ikke vil delta på møtet, delvis med henvisning til angrepet på øst-vest-rørledningen. [1] Omani Foreign Minister Badr Albusaidi said on X later on Sunday, however, that a scheduled Monday meeting in Oman between Gulf countries and Iran to discuss the Strait of Hormuz had been postponed. [2] No peace talks have been held in the war, launched six months ago by the United States and Israel, since an interim agreement in June collapsed after a few weeks. [2]
Limited Short-Term Impact on South Korea
The recent shutdown of a major oil pipeline in Saudi Arabia is expected to have only a limited impact on supply in the short term, the industry ministry said Monday, pledging to closely monitor the situation in cooperation with relevant businesses. [3] The Ministry of Trade, Industry and Resources hosted a meeting with businesses to discuss ways to address escalating tensions in the Middle East, including an attack on Saudi Arabia's crucial East-West pipeline. [3] According to the ministry, local oil refiners have secured more than 90 percent of the crude needed for September and October based on the previous year's levels, noting that the latest developments are expected to cause very little shortfalls in regard to supply. [3] The government said it will continue to monitor developments in the Middle East while supporting shippers seeking to use alternative routes. [3] "The government will communicate closely with oil refiners and maritime shippers while closely monitoring supply conditions to prevent any inconvenience to the public," Vice Industry Minister Moon Shin-hak said. [3] South Korea will also utilize all available policy measures, including a crude oil swap system with private companies, he added. [3]
What to watch next: Observers will track whether the East-West pipeline returns online quickly or if this week's talks in Oman produce something operational, as analysts have warned that without either development the risk remains that crude oil continues to extend its gains.
