Brent Crude Jumps 3.1% to $107.82 on Supply Fears
Global benchmarks surged Monday as Saudi Arabia halted a major pipeline route following a drone attack.
Brent crude futures closed at $107.82 per barrel, marking a 3.1 percent gain. US West Texas Intermediate crude rose 3.2 percent to $103.22. These moves represent the sharpest daily increase in recent weeks.
The price spike followed a drone attack that forced the temporary closure of Saudi Arabia’s East-West pipeline. Riyadh and Baghdad stated the drones originated in Iraq. The disruption removed a key alternative export route from the market.
Pipeline closure removes key export route
The 1,200-kilometre pipeline transports oil from eastern Saudi Arabia to the Red Sea port of Yanbu. This route bypasses the Strait of Hormuz entirely. It carries approximately 4 million barrels of oil per day.
This volume accounts for up to 4 percent of global oil supply. Saudi Arabia holds limited stockpiles at Yanbu to cover the gap. Estimates suggest these reserves last only five to seven days if the line remains shut.
Strait of Hormuz traffic declines
Shipments through the Strait of Hormuz have also fallen sharply. Ongoing regional conflict has reduced vessel movement in the area. Fewer ships are currently transiting the critical waterway.
Only four vessels exited the Gulf over the weekend. Ten vessels entered the area. These figures are well below the 10-day average. The combined reduction in flow has intensified supply concerns.
Market data reflects rising tension
Oil prices have remained above $100 per barrel in recent days. Middle East tensions continue to drive the upward trend. Traders are pricing in the risk of further disruptions. GN auto markets/energy: crude oil prices data confirms the sustained level.
The market reaction is immediate and significant. Both major benchmarks recorded triple-digit gains in value. The physical supply constraints are now fully reflected in the contract prices.
