Oil jumps again: Brent hits $107.68 as Saudi pipeline stays shut and Houthis tighten grip on Bab al-Mandeb

Oil prices rose early Monday in European trading as supply concerns deepened after a key Saudi oil pipeline remained shut and Iran-backed Houthi militants in Yemen tightened their control over the Bab al-Mandeb Strait — adding pressure to Middle Eastern crude export routes already constrained by the U.S.–Iran conflict.

Front-month Brent crude futures rose 2.9% to $107.68 a barrel, while West Texas Intermediate contracts gained 2.8% to $102.88. Both benchmarks closed last week with strong gains — Brent up 8.7% and WTI 9.4% — as investors responded to growing concerns over global supply.

Saudi Arabia’s East-West pipeline remains closed after multiple drone attacks last week, which the Saudi Foreign Ministry said Saturday caused injuries and damage. The pipeline carries oil from the kingdom’s producing east to the Red Sea coast, providing an important alternative export route while shipping through the Strait of Hormuz remains constrained.

The Iran-backed Houthis seized Perim Island and the coastal town of Dhubab last week, following the capture of Mokha — tightening their control over the Bab al-Mandeb Strait and raising risks around Red Sea oil shipments. Kamco Invest said restricted shipping routes and low refined-product inventories have left the oil market particularly vulnerable to further geopolitical shocks; buyers in China and Singapore are securing oil from as far afield as Latin America and West Africa, while South Korean refined products are taking longer routes to Europe.

The International Energy Agency (IEA) said Friday that the diplomatic standoff between the U.S. and Iran and renewed attacks in the Persian Gulf and at Bab al-Mandeb have pushed the outlook for normalized oil flows into next year. The agency now expects global oil supply to fall by 5.7 million barrels a day this year, to an average of 100.7 million barrels a day — down 1.3 million barrels a day from its previous forecast — with the full recovery of Middle Eastern supplies delayed into 2027. Meanwhile, OPEC is less pessimistic, forecasting global oil demand growth of about 400,000 barrels a day this year.

Source: Wall Street Journal