Global oil prices climbed further on Tuesday as fresh attacks on Saudi Arabia’s energy infrastructure and the continued outage of the kingdom’s East-West oil pipeline intensified concerns over crude supplies.
According to Reuters, Brent crude futures rose 2.37% to $108.18 a barrel, while US West Texas Intermediate (WTI) futures increased 2.43% to $103.85 a barrel.
Oil market concerns intensified after Yemen’s Houthi forces reported fresh attacks on Saudi Arabia, while planned discussions between Gulf Arab states and Iran were postponed.
Saudi Arabia’s East-West pipeline remains offline following an attack. The strategically important pipeline allows the kingdom to transport oil exports to the Red Sea while bypassing the Strait of Hormuz.
Goldman Sachs warned that prolonged disruption to the pipeline could put further pressure on oil prices. Under certain scenarios, Brent crude could rise above $120 per barrel, particularly if Gulf oil production remains significantly below pre-conflict levels.
Meanwhile, commercial vessel traffic through the Strait of Hormuz has also fallen, raising further concerns about one of the world’s most important oil transit routes.
Analysts warned that if the pipeline remains shut for several weeks without an adjustment in demand or increased oil flows through the Strait of Hormuz, Brent prices could move substantially higher.
