Oil prices continue surge, rising 3% as attacks halt Saudi pipeline

Saudi Arabia's East-West Pipeline was temporarily shut following a drone attack, according to Saudi officials. The shutdown of the pipeline, which helps Saudi Arabia avoid the Strait of Hormuz by re-routing them to the Red Sea, threatens up to 4% of global oil supply.

With the pipeline out of service, the Red Sea port of Yanbu will have to draw on storage, which is estimated to cover five to seven days of exports, according to three industry sources.

"The relatively contained price reaction suggests the market still expects Saudi inventories to cushion exports in the near term, but if the disruption extends beyond the five-to-seven-day inventory cushion, that could change quickly," said Janiv Shah, oil markets analyst at Rystad.