Oil prices rise after attacks on pipeline in Saudi Arabia
In Saudi Arabia, a series of drone attacks forced the authorities to shut down the East-West oil pipeline, after which the price of Brent exceeded $107 per barrel. As The Guardian reports, quotations for the international benchmark reached $108 per barrel on Monday before later declining to $107.7. This was 3% higher than at the start of the day.
Risks to supplies
The market was also affected by attacks by Yemen’s Houthis, whom the publication describes as allies of Iran. On Sunday, they seized the strategic island of Perim in the Bab el-Mandeb Strait, expanding control over the waterway.
Market concerns were also heightened by the postponement of a meeting between the Gulf states and Tehran. The meeting was intended to discuss the creation of a temporary shipping corridor through the Strait of Hormuz, which normally carries one-fifth of global oil and gas supplies. Traders in Saudi Arabia warned that the country could exhaust its oil stocks for export if the pipeline is not restored within several days.
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Gas prices rise
In the United Kingdom, the benchmark gas price rose by 5% on Monday to 208.73 pence per therm, the highest level since December 2022. Energy prices have risen this year amid the war of the United States and Israel against Iran, which disrupted oil and gas supplies in the Middle East.
In April, the price of oil reached $126 per barrel, before declining in the summer due to expectations of a prolonged ceasefire. Last week, Brent again exceeded $100 per barrel for the first time since July. Chris Beauchamp, an analyst at brokerage firm IG, said that a return of quotations to the spring highs appears increasingly likely due to attacks on energy infrastructure, the situation in the Strait of Hormuz, and the collapse of negotiations.
According to Bloomberg, Saudi Arabia previously told OPEC that its oil production in August was the lowest since 1990.
