Oil rises past $107 a barrel after drone strike shuts Saudi East-West pipeline

Surge in crude and natural gas prices

Crude oil prices opened the week with sharp gains on Monday, 14 September 2026, driven by infrastructure closures and maritime attacks in the Middle East. Brent crude for November delivery rose 2.80% to reach $107.54 per barrel in Asian trading, touching $108 per barrel after gaining roughly 9% over the previous week. West Texas Intermediate for October delivery climbed 2.29% to $102.34 per barrel, holding at four-month highs. European natural gas prices also jumped by more than 4.5% past 83 euros, reaching their highest levels since December 2022. The price increases follow constrained shipments of liquefied natural gas from Qatar through the Persian Gulf and lower inventory levels in Europe, where overall storage sits at 68.04%, with Germany at 55.60% and the Netherlands at 52.13%.

Pipeline shutdown threatens export routes

The market rally followed the shutdown of Saudi Arabia's East-West pipeline on Friday, 11 September 2026, after drone strikes launched from Iraq targeted the facility. The conduit transports crude across the Arabian Peninsula from eastern oil fields to the Red Sea port of Yanbu, carrying a total capacity of approximately 7 million barrels per day. Saudi authorities had been using the route to redirect between 4 million and 5 million barrels per day, bypassing the Strait of Hormuz where maritime transit has been blocked. Traders and oil buyers stated that prolonged disruption of the conduit puts up to 4% of global oil supply at risk. Sources cited by Reuters indicated that repairing the pipeline damage could take five to six weeks, though partial pumping might resume sooner while work proceeds.

Depleting storage buffers in Yanbu and Egypt

With the East-West pipeline out of service, the Red Sea export terminal at Yanbu holds enough crude reserves to sustain shipments for only five to seven days. Yanbu maintains an overall storage capacity of roughly 35 million barrels, while complementary Saudi storage reserves in Egypt hold 18 million barrels at Ain Sokhna on the Red Sea and 20 million barrels at Sidi Kerir on the Mediterranean. Analysts from ING noted the growing pressure on regional infrastructure.

This development comes following the escalation of attacks against Saudi Arabian energy infrastructure, including the targeted attack on the critical East-West pipeline.

Saudi Arabia's overall oil supply had already dropped to three-decade lows in August, compounding market pressure alongside the loss of roughly 10% of global oil caused by the closure of Hormuz.

Stalled diplomacy and escalating maritime strikes

Diplomatic efforts to secure shipping corridors through the Persian Gulf stalled on Sunday, 13 September 2026, after Oman postponed a planned foreign ministerial summit. Omani Foreign Minister Badr Albusaidi announced the delay after Saudi Arabia expressed reservations about establishing a temporary transit route through the Strait of Hormuz, while Bahrain declined to attend. Regional security deteriorated further over the weekend as a commercial vessel came under fire in the Strait of Hormuz, resulting in the death of one crew member. Meanwhile, Yemen's Houthi rebels launched ballistic missiles and drones against a southern Saudi military base and targets in Jazan province after moving forces onto Perim Island.