Global oil prices surged sharply due to the suspension of crude oil loading at the Saudi export hub of Yanbu and the cancellation of some deliveries to Europe. Brent rose by 2.9% to $108.75 per barrel, while U.S. WTI increased by 4.38% to $105.83, Reuters reports, as cited by UNN.
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Both benchmarks ended trading at their highest levels since May 19. Traders’ concerns intensified following reports that Saudi Arabia had canceled some crude oil deliveries to European buyers scheduled for late September.
The key issue was the approximately 1,200-kilometer East-West Pipeline, through which Saudi Arabia redirected oil to the Red Sea, bypassing the Strait of Hormuz. Following the Houthi attack, this route was closed.
Up to 4% of global supplies at risk
The pipeline’s importance increased sharply after the effective cessation of normal shipping through the Strait of Hormuz. According to preliminary Kpler data, only 4 cargo vessels passed through it on Monday, compared with 10 the previous day.
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According to buyers and traders, if the East-West Pipeline does not resume operations soon, Saudi Arabia could exhaust its oil stocks available for export within several days. Disruptions along this route pose risks to volumes equivalent to up to 4% of global supply.
The repair timeline remains uncertain. According to Goldman Sachs, estimates range from a resumption of operations in the near term to 8 weeks. The bank also allows for Brent to rise above $120 per barrel in the event of prolonged disruptions to oil supplies from the Persian Gulf.
An Iranian vessel was hit in the Strait of Hormuz; one person was killed - CNN15.09.26, 09:15