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.
Brent crude futures LCOc1 rose $2.90, or 2.77%, to $107.51 per barrel as of 2313 GMT. WTI futures LCOc1 rose $2.27, or 2.27%, to $102.32 per barrel. Prices had initially risen more than 3% at market open.
Pipeline shutdown and shipping risks
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. The Houthis said they had also struck a Saudi military base in a neighbouring province.
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.
Iran said one person was killed and four crew wounded aboard an Iranian commercial vessel struck off its coast.
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.
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.
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.
Talks postponed as crude extends gains
Oil surged 8% higher on the week due to the disruptions, rising above $100 for the first time since July.
"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.
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.
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.
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