Crude Oil rallies again as Saudi Arabia's route around Hormuz shuts

West Texas Intermediate (WTI) Crude Oil prices surged 3% on Friday, trading above $100.00, as Saudi Arabia shut its East-West pipeline around Hormuz. This move is stoking concerns about potential supply disruptions. The pipeline, built in 1981 during the Iran-Iraq war, allows Saudi crude to reach the Red Sea port of Yanbu without passing through the Strait of Hormuz.

With Iran blocking the strait in March, Yemeni militias attacked it on Thursday, prompting Riyadh to close the pipeline as a precaution. The repair could take three to five weeks. Yanbu's tanks hold about 15 million barrels, and Asian refiners expecting no delays had no updates as of Monday. The outage is estimated to be 120 million barrels for a month, based on the pipeline's daily output of 4.5 million barrels.

Brent, the seaborne benchmark, is trading near $108.00. The Federal Reserve meets on the consequences on Wednesday. The Straits of Hormuz witnessed a decline in cargo vessels, with only four counted on Monday, down from ten on Sunday. Despite the American Petroleum Institute's inventory count showing commercial Crude Oil stocks flat with the five-year average, the Strategic Petroleum Reserve (SPR) is at its lowest since November 1982, with 285.4 million barrels.