Oil price today: Brent crude rises as Saudi pipeline outage raise supply concerns

The rise in oil prices added to inflation concerns.

Oil prices rose more than 1% on Tuesday as concerns over global supplies intensified after attacks disrupted Saudi Arabia’s East-West pipeline and planned talks between Gulf Arab states and Iran were postponed.Brent crude futures gained $1.24, or 1.18%, to $106.93 a barrel at 0026 GMT, after rising 1% in the previous session. US West Texas Intermediate (WTI) crude futures climbed $1.29, or 1.24%, to $102.65 a barrel, following a 1.3% increase on Monday.Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, targeting the Khamis Mushait military airbase in the country’s south.The Houthis said the missile and drone attack was carried out in retaliation for Saudi strikes in Yemen.

The assault reportedly targeted aircraft hangars, radar systems, runways and ammunition depots.The latest attack followed strikes on Friday that Riyadh blamed on Iran-backed fighters in Iraq. Those attacks disrupted Saudi Arabia’s East-West pipeline, which allows the kingdom to transport oil to the Red Sea and bypass the Strait of Hormuz.Saudi Arabia uses the pipeline to reroute around four million barrels of oil per day to the port of Yanbu.

The outage could remove as much as 4% of global oil supply from the market if operations are not restored, according to Saudi buyers and traders.Shipping concerns also deepened after commodity vessel traffic through the Strait of Hormuz fell to fewer than 10 transits a day over the weekend, compared with a 10-day average of 14.The waterway carried nearly one-fifth of global oil supplies before the US-Israeli war on Iran began on February 28.

Gulf Arab states also postponed planned discussions with Iran, adding to concerns that the regional conflict could widen and further disrupt energy shipments.The rise in oil prices added to inflation concerns and pushed benchmark 10-year US Treasury yields to 5% overnight—their highest level since October 2023. The yield later eased to 4.9895%.Asian shares remained subdued as investors assessed Middle East tensions, higher oil prices and elevated bond yields ahead of key central bank meetings in the United States and Japan.MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.12%, while South Korea’s benchmark declined 0.25%. Japan’s Nikkei edged up 0.19% after recovering from early losses.The Bank of Japan is widely expected to raise its interest rate by 25 basis points to 1.25% at the end of its two-day meeting on Friday and signal further tightening.In currency markets, the dollar index rose 0.05% to 99.53. The dollar gained 0.17% against the yen to 154.61, while the euro slipped 0.03% to $1.1543. Spot gold fell 0.15% to $4,291.59 an ounce, while silver declined 0.31% to $63.03.