Brent Crude Surges Above $107 on Saudi Pipeline Shutdown, Hormuz Risks

Brent crude oil prices surged above $107 per barrel on Monday, driven by a combination of a drone attack that shut down Saudi Arabia's critical East-West pipeline and heightened tensions in the Strait of Hormuz, developments that together threaten a significant portion of global oil supply. The price of Brent, the global benchmark, rose by around 3% to trade near $108, while U.S. West Texas Intermediate crude gained over 2% to climb above $102. The sharp rally was triggered after Saudi officials confirmed the temporary shutdown of the East-West pipeline following a drone attack. The 1,200-kilometer pipeline is a vital strategic asset, allowing the kingdom to bypass the Strait of Hormuz and transport crude from its eastern oilfields directly to the Red Sea port of Yanbu. Its capacity to move up to 4 million barrels per day means the outage threatens roughly 4% of global oil supply. Industry sources indicated that Yanbu has sufficient inventories to sustain exports for only five to seven days while the pipeline remains offline.