Oil prices rose on Tuesday, September 15, as concerns over supply disruptions intensified following attacks on Saudi Arabian energy infrastructure. The kingdom's East-West pipeline was forced offline, casting doubt on efforts to ease shipping risks in the Gulf region. This pipeline is a crucial alternative to the Strait of Hormuz for Saudi oil exports and its closure has removed a significant portion of global oil supply from the market.
Brent crude futures increased by $1.24, or 1.18%, to reach $106.93 a barrel. U.S. West Texas Intermediate futures also saw a rise, up $1.29, or 1.24%, to $102.65 a barrel. Both benchmarks had already gained more than 1% in the previous trading session, reflecting persistent market anxiety. The outage is estimated to potentially remove as much as 4% of global oil supply from the market, as the pipeline typically reroutes around 4 million barrels per day to the port of Yanbu on the Red Sea.
The shutdown followed attacks on September 11, which Saudi Arabia attributed to Iranian-backed fighters in Iraq. Additionally, Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday. These incidents, combined with the postponement of a planned meeting between Iran and several Gulf nations to discuss shipping risks, have heightened fears about Middle Eastern stability. U.S. Energy Secretary Chris Wright stated on Monday that the critical Saudi oil pipeline should be back online "soon" after assessing the damage, but clarity on the duration of the outage is still pending.
