Oil jumps as shutdown of Saudi pipeline deepens energy crisis

Oil prices surged on Tuesday amid ongoing supply concerns following attacks on Saudi Arabia's energy infrastructure, which left the East-West pipeline offline and raised doubts about efforts to ease shipping risks in the Gulf. Brent crude futures climbed $1.24, or 1.18%, to $106.93 a barrel, while U.S. West Texas Intermediate futures increased $1.29, or 1.24%, to $102.65 a barrel.

Iran-backed Houthi forces in Yemen launched fresh strikes on Saudi Arabia on Monday, targeting military facilities, radar systems, and ammunition depots in retaliation for Saudi attacks in Yemen. This comes after attacks on Friday on Saudi Arabia, blamed on Iranian-backed fighters in Iraq, disrupted the East-West pipeline, which allows oil exports to bypass the blockaded Strait of Hormuz.

Oil traders view each attack or infrastructure hit as incremental supply risk, closely monitoring the possibility of normalization in East-West pipeline or Hormuz flows. Gulf Arab states' postponement of discussions with Iran has fueled fears of a Middle East conflict widening and disrupting global oil supplies. The world's largest exporter might run out of oil to export within days if it cannot restore the East-West pipeline, potentially removing up to 4% of global oil supply from the market.

Commodity traders are concerned about the duration of the outage, as prolonged disruptions could drive prices higher.