Oil prices rise as Saudi pipeline outage, fresh attacks raise supply concerns

Brent crude futures rose $1.24, or 1.18%, to $106.93 a barrel at ‌0026 GMT, after climbing 1% previously, while U.S. West Texas Intermediate futures were up $1.29, or 1.24%, at $102.65 a barrel, after gaining 1.3% in the previous session.

Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, while ​Gulf Arab states postponed planned discussions with Iran, fuelling concerns that the Middle East ​conflict could widen and disrupt global oil supplies.

The Houthis carried out a missile ⁠and drone attack on the Khamis Mushait military airbase in southern Saudi Arabia, hitting aircraft hangars, ​radar systems, runways and ammunition depots in retaliation for Saudi strikes in Yemen.

This followed attacks on Friday ​on Saudi Arabia, which Riyadh blamed on Iranian-backed fighters in Iraq, that disrupted the country's East-West pipeline, which allows oil exports to bypass the blockaded Strait of Hormuz.

"Oil traders are treating every fresh attack or infrastructure hit as incremental ​supply risk, while staying highly sensitive to any sign that the East-West pipeline or Hormuz flows ​could normalise," said Tim Waterer, chief market analyst at KCM Trade.

Commodity vessel traffic through the Strait of Hormuz dropped ‌to ⁠fewer than 10 transits a day over the weekend, from a 10-day average of 14, raising concerns over a route that typically carried about one-fifth of global oil supplies before the U.S.-Israeli war on Iran began on February 28.

Saudi Arabia could begin to exhaust oil available for export within days unless ​it restores operations on ​the East-West pipeline, potentially ⁠removing as much as 4% of global oil supply from the market,.

The world's biggest exporter has used the pipeline ​to reroute around 4 million barrels per day — around 4% of global ​supply — to the ⁠port of Yanbu on the Red Sea. "The big question for traders right now is the duration of the East-West outage.

Any prolonged disruption and the associated supply loss could easily push prices to the next ⁠level ​higher," Waterer added. Separately, President Volodymyr Zelenskiy said on Monday that ​Kyiv was ready to support a U.S. proposal for a Russia-Ukraine ceasefire on energy sites only if Washington could ensure Moscow ​was genuinely ready to end its war on Ukraine.