Oil climbs as Saudi pipeline outage, fresh attacks heighten supply concerns

The Express Tribune reported that oil prices climbed on Tuesday as supply worries deepened after strikes on Saudi energy facilities took the East-West pipeline out of service. Brent futures added $1.37 to reach $107.05 a barrel, a 1.3% increase, while WTI climbed 1.51% to $102.92. Both contracts had also gained over 1% during the prior trading day.

Iran-backed Houthi forces, based in Yemen, fired new missile and drone strikes at Saudi Arabia on Monday, hitting the Khamis Mushait military airbase in the south of the kingdom. Targets reportedly included hangars, radars, runways and munitions stores, and the strikes were described as retaliation for Saudi raids in Yemen. Gulf Arab states, meanwhile, postponed planned talks with Iran, which deepened worries about a possible broadening of the Middle East confrontation.

Ship movements carrying commodities through Hormuz slid to under 10 transits daily across the weekend, against a 10-day average of 14. Before the conflict that began on February 28, the strait normally handled around one-fifth of the world's oil. Saudi buyers and traders cautioned that exports could run dry within a matter of days unless flows through the East-West line resume, a loss that could reach up to 4% of worldwide supply. ING analysts said the scale of the harm and the length of the outage remained unclear, so prices were likely to stay well supported until clarity emerges.