Oil prices rose above $107 a barrel on Tuesday after attacks on Saudi Arabian energy infrastructure deepened fears of a prolonged disruption to global crude supplies.
Brent crude futures climbed to about $107.35 a barrel, while US West Texas Intermediate rose above $103, according to Reuters. The increase followed reports that Saudi Arabia’s East-West pipeline had been taken offline after an attack, adding to concerns over the security of oil production and export routes across the Gulf.
The pipeline, which runs from Saudi Arabia’s oil-producing east to Yanbu on the Red Sea, is strategically important because it allows the kingdom to move crude without relying entirely on the Strait of Hormuz. Its disruption could complicate efforts to maintain exports if shipping through the strait remains restricted.
The latest attacks came as Houthi forces in Yemen claimed to have launched missiles and drones at targets in southern Saudi Arabia. The group said the strikes were retaliation for Saudi military operations in Yemen.
Saudi officials have not publicly confirmed every detail of the Houthi claims, but the attacks have heightened market concerns about the vulnerability of regional energy infrastructure. Analysts warned that the consequences could extend beyond temporary price volatility if repairs take weeks or if additional facilities come under attack.
The crisis is also affecting maritime security. The Bab al-Mandeb Strait, which connects the Red Sea to the Gulf of Aden, has become increasingly important as an alternative route for energy shipments amid disruption around Hormuz.
The combined pressure on both passages has raised the risk of a wider supply shock. Reuters reported that as much as 4 per cent of global oil supply could be at risk if the disruption continues.
Higher oil prices are likely to increase inflationary pressure on fuel-importing countries, raise transport and production costs, and complicate interest-rate decisions by central banks. The effects could be particularly severe in countries already facing currency weakness and high energy-import bills.
For Saudi Arabia, the attacks represent a direct challenge to its energy infrastructure and regional security strategy. For global markets, the immediate concern is whether the conflict remains contained or develops into a sustained threat to oil production and shipping.
