Oil prices surge above US$107 as Middle East supply risks deepen

Oil prices surged more than 2% on Monday, breaching the US$107 mark as fears over supply disruptions intensified following a series of attacks in the Middle East. Brent crude futures climbed to US$107.51 a barrel, while US West Texas Intermediate futures rose to US$102.32. The increase came after Yemen’s Iran-aligned Houthi group struck Saudi Arabia and Iran attacked vessels, causing heightened concerns over global supplies.

The attacks added to worries over Saudi oil exports, which were already threatened by the closure of a key Saudi pipeline following a drone strike from Iraq. The pipeline shutdown, which could affect up to 4% of global oil supply, compounded the risks associated with the Strait of Hormuz, a crucial route for crude shipments. Omani Foreign Minister Badr Albusaidi announced that a scheduled meeting in Oman to discuss the Strait of Hormuz had been postponed.

Meanwhile, the US dollar held steady while the euro and Japanese yen reached near seven-month highs, as investors anticipated potential monetary policy decisions from the Federal Reserve and Bank of Japan later in the week.