Oil Hits $102.69 as Saudi Pipeline Outage Threatens Supply
Crude oil prices surged to record highs following the closure of a critical Saudi export route. Global equity markets opened in the red, with investors reacting to geopolitical instability and shifting central bank expectations.
US WTI crude oil rose 2.71 percent to 102.69 dollars per barrel. European Brent crude tested the 107 dollar mark during overnight trading. The price spike follows the closure of the East-West pipeline in Saudi Arabia.
The outage removes approximately 4 million barrels of daily supply from the market. Saudi export reserves could deplete within five to seven days. Repairs may take over one month due to a shortage of spare parts.
Middle East tensions drive risk aversion
Iraqi drones attacked Saudi infrastructure, triggering the pipeline shutdown. A projectile struck a vessel in the Strait of Hormuz. Diplomatic meetings between Gulf states and Iran have been postponed.
Goldman Sachs now expects a 25 basis point rate hike by the US Federal Reserve on Wednesday. Christine Lagarde warned that eurozone inflation will persist longer than previously anticipated. These signals contradict earlier expectations of monetary easing.
Global equities face broad sell-off
US futures opened lower, with the tech-heavy US100 down 1.31 percent. The broad-based US500 fell 0.57 percent. European indices also declined, with the German DE40 down 0.29 percent.
Asian markets recorded significant losses. The Japanese JP225 index futures dropped 2.12 percent. The South Korean Kospi index opened 3.45 percent lower. China’s markets showed relative stability compared to the region.
Dollar strength and currency shifts
The US Dollar Index rose 0.22 percent as capital flowed into safe-haven assets. The euro fell 0.23 percent against the dollar. The British pound decreased by 0.11 percent against the greenback.
Emerging market currencies faced pressure. The dollar gained 0.37 percent against the Polish zloty. Natural gas prices rose 2.70 percent in parallel with crude oil. Gold corrected slightly by 0.42 percent to 4,329 dollars.
