Brent Crude Tops $106 as Saudi East-West Pipeline Shuts After Drone Attacks, Closing Last Hormuz Bypass Route

Saudi Arabia shut down its East-West crude oil pipeline on Friday after multiple drone strikes launched from Iraq damaged the artery in the Riyadh and Medina regions on Thursday, removing the kingdom's last major route for exporting oil that bypasses the Strait of Hormuz. Brent crude surged past $106 a barrel on Monday, extending a rally of nearly 9% from the prior week, while West Texas Intermediate traded near $103. European natural gas also climbed, rising as much as 3.8%.

The pipeline closure compounds a cascading set of disruptions across the region. The Strait of Hormuz remains closed amid the broader US-Iran conflict, and Iran-allied Houthi militants have seized the port city of Mokha and strategic Perim Island in the Bab al-Mandeb Strait, giving them a stronger position to choke off that southern Red Sea corridor as well. Houthi strikes on Saudi energy facilities earlier in the week injured more than 70 people, according to Saudi state media.

Repairs to the East-West pipeline are expected to take several weeks, according to an Ahram Online report, though US Energy Secretary Chris Wright said Monday the line should be back online "soon." Saudi Arabia is seeking to boost oil exports through the Strait of Hormuz while the pipeline remains offline, but the combination of closed or contested chokepoints severely limits the kingdom's and other Gulf states' ability to move crude to global markets. Bloomberg Economics analyst Ziad Daoud warned that prolonged disruption could tighten global energy supplies further at a time when the market is already constrained.