Oil prices surge over $3 on fresh strikes in Persian Gulf

Brent crude jumped more than $3 per barrel after a cascade of attacks rattled the Persian Gulf, hitting Saudi Arabia’s critical pipeline infrastructure and a commercial vessel navigating the Strait of Hormuz. With prices already flirting with the $100 mark heading into September, the oil market’s margin for bad news was effectively zero. What happened The most consequential strike landed on September 11-12, when drones believed to have been launched by Iran-backed militias operating from Iraqi territory targeted Saudi Arabia’s East-West pipeline. Riyadh responded by suspending pipeline operations as a precautionary measure, cutting off a conduit capable of moving roughly 7 million barrels per day at full capacity. In practice, the pipeline had been transporting around 4 to 5 million barrels daily before the shutdown. Then on September 13, a projectile struck a vessel transiting the Strait of Hormuz, sparking fires onboard and forcing the crew to evacuate. Earlier in the month, around September 8, Houthi strikes had already hit Saudi energy sites, causing injuries and amplifying concerns about Red Sea shipping routes. A supply picture that was already tight Saudi oil exports had alr...