Oil climbs to $106 after Saudi pipeline shutdown

Crude oil prices climbed on September 14 after Saudi Arabia suspended its East-West pipeline, which was damaged by drones launched from Iraq on Thursday. According to Mettis Global, Brent futures gained 2.06 per cent to $106.77 a barrel, while West Texas Intermediate futures also climbed to the same level. Riyadh has not yet said how badly the line was hit or when operations will resume.

The pipeline can move around 7 million barrels per day from the kingdom's oil-producing areas to Red Sea terminals, giving Saudi Arabia an alternative export route. CNBC reported that the kingdom had leaned more heavily on it to shift exports away from the Strait of Hormuz during the Iran and United States confrontation. The disruption also forced the postponement of a diplomatic meeting between Iran and Gulf Arab states that had been set for Oman on Monday.

Separately, another tanker came under attack near the Strait of Hormuz and suffered a serious fire, according to the UK Maritime Trade Operations Center. Houthi militants have reportedly seized Perim Island in the Bab el-Mandeb Strait after taking the Yemeni port city of Mokha. Saudi Aramco chief executive Amin Nasser has said the pipeline did more to steady markets than the large United States release of strategic reserves.