BEIJING: Oil prices rose nearly 2% on Tuesday as concerns over supply disruptions lingered after attacks on Saudi Arabian energy infrastructure left the kingdom's East-West pipeline offline and cast doubt on efforts to ease shipping risks in the Gulf.
Brent crude futures rose $1.87, or 1.77%, to $107.55 a barrel at 0633 GMT, while U.S. West Texas Intermediate futures were up $1.88, or 1.85%, at $103.27 a barrel. Both benchmarks rose more than 1% in the previous session.
Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia on Monday, while Gulf Arab states postponed planned discussions with Iran, fuelling concerns that the Middle East conflict could widen and further disrupt global oil supplies.
The Houthis carried out a missile and drone attack on the Khamis Mushait military airbase in southern Saudi Arabia, hitting aircraft hangars, radar systems, runways and ammunition depots in retaliation for Saudi strikes in Yemen.
This followed attacks on Friday on Saudi Arabia, which Riyadh blamed on Iranian-backed fighters in Iraq, that disrupted the country's East-West pipeline, which allows oil exports to bypass the blockaded Strait of Hormuz.
"Oil traders are treating every fresh attack or infrastructure hit as an incremental supply risk, while staying highly sensitive to any sign that the East-West pipeline or Hormuz flows could normalise," said Tim Waterer, chief market analyst at KCM Trade.
Commodity vessel traffic through the Strait of Hormuz dropped to four on Monday, down from 10 a day earlier, preliminary data from Kpler showed on Tuesday, raising concerns about a route that carried about a fifth of global oil supplies before the U.S.-Israeli war on Iran kicked off on February 28.
Saudi Arabia could begin to exhaust oil available for export within days unless it restores operations on the East-West pipeline, potentially removing as much as 4% of global supplies from the market, according to Saudi buyers and traders.
The world's biggest exporter has used the pipeline to reroute about 4 million barrels per day - around 4% of global supply - to the port of Yanbu on the Red Sea.
"Plenty of uncertainty remains over the extent of damage and the duration of the outage for the East-West pipeline in Saudi Arabia. Prices are likely to remain well supported until we get clarity," ING analysts said in a note.
Separately, President Volodymyr Zelenskiy said on Monday that Kyiv was ready to support a U.S. proposal for a Russia-Ukraine ceasefire on energy sites only if Washington could ensure Moscow was genuinely ready to end its war on Ukraine.
In China, official data showed that oil throughput rose for a second straight month in August, boosted by fuel exports after Beijing eased restrictions in mid-July. - Reuters
