Oil prices jump more than 2% after new strikes on Saudi, Strait of Hormuz

Oil prices climbed over 2% on Monday following additional Houthi attacks on Saudi Arabia and Iranian assaults on ships in the Strait of Hormuz, exacerbating supply worries after a vital Saudi oil pipeline was shut down. Brent crude futures climbed $2.90, or 2.77%, to $107.51 per barrel, while WTI futures increased $2.27, or 2.27%, to $102.32 per barrel.

Initial gains exceeded 3% at the market's opening bell. Saudi Arabia released video footage on Sunday showing damage from a Houthi strike targeting homes and a mosque in Jazan province. The Houthis also claimed to have targeted a Saudi military base elsewhere. An Iranian-operated vessel in the Strait of Hormuz was hit by a projectile, igniting a fire and requiring evacuating the crew, according to the UK Maritime Trade Operations (UKMTO).

Iran reported one fatality and four wounded crew members on an Iranian commercial ship struck off its coast. Oil prices were anticipated to rise on Monday due to heightened concerns over potential supply disruptions from Saudi Arabia, the world's top oil exporter. The East-West oil pipeline, which aided Saudi Arabia in rerouting exports and avoided the Strait of Hormuz, was crippled by a drone strike on Friday, potentially impacting up to 4% of global oil supplies.

Yemen's Iran-aligned Houthi rebels had advanced to the strategic island of Perim by Friday, consolidating their control over the Bab el-Mandeb Strait, another crucial oil transit route responsible for shipping 4-5% of global oil supply. Oil prices jumped 8% over the week, surpassing $100 for the first time since July. Analyst Tony Sycamore cautioned that unless talks in Oman on Monday yield a resolution or the East-West pipeline resumes operation swiftly, crude oil could continue its upward trajectory toward the $119.48 peak reached in early March.

Meanwhile, Omani Foreign Minister Badr Albusaidi announced on X that a planned Monday meeting in Oman involving Gulf nations and Iran to address the Strait of Hormuz had been postponed. Peace discussions between the United States, Israel, and Iran, which commenced six months ago, have remained inconclusive since an interim agreement unraveled after just a few weeks.