Oil prices rose sharply on Monday as fresh Houthi attacks on Saudi Arabia and new incidents around the Strait of Hormuz increased concerns about possible supply disruptions across the Middle East.
The postponement of planned talks between Iran and other Gulf countries also added to market uncertainty. The delay increased the geopolitical risk premium in crude oil and kept prices close to their highest levels of the year.
Brent crude futures jumped as much as 3.5% to $108.41 per barrel before easing slightly to around $107.37.
West Texas Intermediate crude futures also moved higher, rising approximately 3.9% to $102.84 per barrel.
Houthi Attacks Increase Oil Supply Risks
The latest move in oil prices was driven largely by renewed attacks from Yemen’s Houthi movement.
The Iran-aligned group targeted additional locations in Saudi Arabia over the weekend, increasing concerns about the security of regional energy infrastructure.
The Houthis have also strengthened their position near the Bab el-Mandeb Strait, giving them greater ability to target vessels and key Saudi energy assets.
That waterway is one of the most important shipping routes connecting the Red Sea with the Gulf of Aden.
Saudi Energy Infrastructure Faces More Pressure
The latest attacks follow a series of strikes against Saudi targets.
Recent incidents reportedly affected an Aramco refinery, a fuel terminal, fuel-processing facilities, airports and vessels operating near the Bab el-Mandeb Strait.
These developments have increased fears that another major Middle East oil export route could become less reliable.
The situation is especially important because part of Saudi Arabia’s crude shipments had been redirected through the Bab el-Mandeb route as traffic through the Strait of Hormuz became more difficult.
Saudi Arabia Shuts Key East-West Pipeline
Saudi Arabia also closed a major East-West oil pipeline following additional Houthi attacks.
The pipeline provides Riyadh with an important alternative route for transporting crude without relying entirely on the Strait of Hormuz.
Its closure reduces Saudi Arabia’s ability to redirect exports if conditions in the Gulf worsen further.
ANZ analysts said the loss of this alternative export route could place additional upward pressure on oil prices during the week.
Bab el-Mandeb Becomes Another Critical Flashpoint
The Bab el-Mandeb Strait has now become an increasingly important source of risk for global oil markets.
The waterway sits at the entrance to the Red Sea and plays a key role in international trade and energy transportation.
If shipping through both Bab el-Mandeb and the Strait of Hormuz remains restricted, global crude supply chains could come under significantly greater pressure.
That possibility is helping keep oil prices elevated.
Oman Confirms Delay to Hormuz Talks
Geopolitical concerns increased further after Oman confirmed that a planned regional meeting had been postponed.
Omani Foreign Minister Sayyid Badr Albusaidi said talks involving Iran and Gulf countries, originally scheduled for Monday, would no longer take place as planned.
The meeting had been viewed by markets as a potential opportunity to ease tensions around the Strait of Hormuz.
Hormuz Diplomacy Had Limited Oil Gains
Expectations surrounding the meeting had previously helped contain gains in crude oil prices.
Investors had hoped that renewed diplomacy could improve shipping conditions and reduce the risk of further supply disruptions.
However, the postponement weakened those expectations.
With no new meeting date immediately available, uncertainty around the Strait of Hormuz is likely to remain elevated in the near term.
Oil Flows Through Hormuz Remain Disrupted
Oil shipments through the Strait of Hormuz have already fallen sharply compared with pre-conflict levels.
Renewed tensions between the United States and Iran during August further reduced traffic through the strategically important waterway.
The strait remains one of the world’s most important routes for crude oil and liquefied natural gas exports.
Any prolonged disruption could have a significant impact on global energy markets.
Oil Prices Stay Supported by Geopolitical Risk
The combination of attacks on Saudi infrastructure, shipping risks in Bab el-Mandeb and uncertainty surrounding the Strait of Hormuz has created a highly supportive environment for crude oil prices.
Brent and WTI remain close to recent highs as traders assess whether Middle East supply disruptions could worsen.
For now, oil markets are likely to remain highly sensitive to developments involving Iran, Saudi Arabia, the Houthis and regional shipping routes.
Any additional escalation could push prices higher, while progress toward renewed diplomatic talks could help reduce some of the current risk premium.
