Oil prices rise as Saudi pipeline outage, fresh attacks raise supply concerns

Brent crude gained $1.24, or 1.18 per cent, to reach $106.93 a barrel on Tuesday, according to Business Recorder, as supply worries lingered after strikes on Saudi energy infrastructure. West Texas Intermediate rose $1.29 to $102.65 a barrel. The increase followed a missile and drone strike by Houthi forces on the Khamis Mushait airbase in southern Saudi Arabia, which hit hangars, radar systems and ammunition depots.

Riyadh blamed Friday's attacks on Iranian-backed fighters in Iraq, and those attacks disrupted the East-West pipeline that lets exports avoid the blockaded Strait of Hormuz. Commodity vessel transits through Hormuz fell below 10 a day over the weekend, compared with a 10-day average of 14. Saudi buyers and traders warned that the kingdom could run out of exportable oil within days unless the pipeline is restored, which could take as much as 4 per cent of world supply off the market.

Tim Waterer of KCM Trade said traders regard each new strike as a small addition to supply risk, while watching closely for any sign that East-West or Hormuz flows are normalising. He added that a prolonged outage could push prices to a higher level. Separately, President Volodymyr Zelenskiy said on Monday that Kyiv would back a truce limited to energy facilities, but only if the United States could confirm Moscow was sincere about ending hostilities.