Brent, WTI Climb Over 2% as Middle East Attacks Stokes Supply Woes

By Adedapo Adesanya

Oil prices climbed over 2 per cent ‌on Monday as worries about energy supplies mounted following new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East.

Brent futures rose $2.72 or 2.6 per cent to $107.33 per barrel, while US West Texas Intermediate (WTI) crude gained $2.51 or 2.5 per cent to trade at $102.56 a barrel.

Fears of a major and extended supply disruption were stoked by continued attacks in the Middle East and the postponement of a crunch meeting between Gulf states and Iran.

Arab states in the Gulf called off the meeting with Iran planned for Monday, as Yemen’s Iran-backed Houthis launched a new attack on Saudi Arabia after fighting ​that has extended the Middle East war to another theatre and further jeopardised global oil supplies.

Over the weekend, the Houthis claimed to have launched a large-scale missile and drone attack against Saudi Arabia, saying they had struck a military base in Sharurah. It was reported that the Saudi government did not confirm that attack, but its media separately reported that a projectile fell in the Jazan region.

The attack appears to be the latest escalation in the conflict between Saudi Arabia and Iranian proxies, following a drone attack on the East-West Pipeline that was launched from Iraq last week.

The United Kingdom Maritime Trade Operations (UKMTO also released an alert saying a vessel within the Strait of Hormuz had been struck by an unknown projectile. It was later reported that an Iranian cargo vessel had been struck early on Sunday off Qeshm Island, although it is unclear if this is the same attack.

Commodity vessel transits through the Strait of Hormuz fell to a single digit per day at the weekend, preliminary ship tracking data showed on Monday, well below a 10-day average of 14. Before ​the US and Israel attacked ​Iran in late February, about ⁠a fifth of the world’s oil supplies passed through the Strait of Hormuz.

With the Saudi east-west pipeline out of service, the Red Sea port of Yanbu must draw on storage, which is estimated ​to cover five to seven days of exports.

​Iran issued a list of 77 ships it said had violated its protocols for operating in the Strait of Hormuz.