Oil prices climb above $100 as Saudi pipeline disruption and fresh attacks on energy infrastructure deepen fears of a wider supply shock
Crude oil prices extended gains on Tuesday as the shutdown of Saudi Arabia’s key East-West pipeline and fresh attacks on energy infrastructure in the region heightened fears of further disruptions to global supplies.
At 10 am, November Brent crude futures were trading at $107.31 a barrel, up 1.54 per cent, while October West Texas Intermediate (WTI) crude futures stood at $103.18, gaining 1.77 per cent. On the Multi Commodity Exchange (MCX), September crude oil futures were at Rs 9,894, up 1.82 per cent from the previous close, while October futures rose 1.59 per cent to Rs 9,464.
The latest gains come after oil prices surged nearly 5 per cent at one point on Monday before paring gains. Brent eventually settled at $105.68 a barrel, up $1.07 or 1 per cent, while WTI gained $1.34, or 1.3 per cent, to settle at $101.39.
Saudi pipeline outage puts supply in focus
The immediate trigger for the latest rally is the shutdown of Saudi Arabia’s East-West pipeline, a critical route that transports crude from the kingdom’s oil-producing regions towards its Red Sea coast.
The pipeline provides Saudi Arabia with an alternative export route that reduces its reliance on shipments through the Strait of Hormuz. Its disruption has therefore added another layer of risk to an already fragile regional energy market.
More from BusinessBrent briefly moved close to $110 a barrel, a level that has emerged as a significant resistance zone for the market. The key question now is how long the pipeline remains offline. A prolonged outage could tighten physical crude supplies and push traders to price in a larger disruption, particularly if attacks on energy infrastructure continue.
Hormuz adds another layer of risk
The situation is being closely watched because of continuing uncertainty around shipping through the Strait of Hormuz, one of the world’s most important energy corridors.
Shipping data showed that the number of vessels passing through the waterway fell below 10 a day over the weekend, compared with a 10-day average of 14 vessels. Any sustained decline in tanker traffic could amplify concerns over crude availability and transportation costs.
The market is therefore balancing two competing forces: the possibility of further supply disruptions and hopes that diplomatic efforts could prevent a wider escalation.
Oil prices had initially jumped sharply on Monday before easing after US President Donald Trump said Iran was seeking a deal with Washington.
What happens next?
The direction of crude prices will depend heavily on the duration of the Saudi pipeline shutdown and whether attacks spread to production, storage or transportation facilities.
A quick restoration of pipeline operations and a de-escalation in the region could unwind some of the geopolitical premium currently embedded in crude prices. But further attacks or prolonged disruption could send Brent decisively higher from current levels above $105.
For oil-importing economies such as India, the risks are significant. Sustained crude prices above $100 a barrel could widen the import bill, pressure the rupee and raise transportation and input costs. It could also complicate the inflation outlook and influence expectations around global interest-rate cuts.
