Oil crosses $108 a barrel after strikes on Saudi Arabia and Hormuz shipping

Oil prices climbed more than $3 a barrel as trading opened on Monday, September 14, after a weekend of strikes on Saudi Arabia and on vessels in the Gulf sharpened concerns about the security of global energy supplies.

Brent crude futures rose $3.62, or 3.46 per cent, to $108.23 a barrel as of 2214 GMT on Sunday. West Texas Intermediate (WTI) futures rose $3.15, or 3.15 per cent, to $103.20 a barrel.

Saudi Arabian state media released video footage on Sunday showing damage to homes and a mosque in the southern Jazan province, which it said was caused by an attack by the Houthi movement. The Houthis said they had also struck a Saudi military base in a neighbouring province. The accounts could not be independently verified, and casualty figures from the Jazan attack were not immediately available.

Separately, the British maritime security agency UKMTO said a vessel in the Strait of Hormuz was struck by a projectile, causing a fire and forcing the crew to be evacuated. Iran said one person was killed and four crew members wounded aboard an Iranian commercial vessel struck off its coast.

The Strait of Hormuz is a narrow waterway linking the Gulf to the Gulf of Oman and the open sea. A substantial share of the world's seaborne oil — commonly estimated at about one-fifth of global consumption — passes through it, which is why any disruption there tends to move prices quickly. Jazan, where the reported strikes took place, lies near Saudi Arabia's southern border with Yemen.

The weekend developments follow the closure last week of Saudi Arabia's East-West pipeline, which carries crude from the kingdom's eastern oilfields to the Red Sea coast, after a drone strike reported to have originated in Iraq. Saudi Arabia is the world's largest oil exporter, and the loss of that outlet has added to pressure on prices.

"Looking ahead, unless this week's talks in Oman produce something operational — or the East-West pipeline is brought back online quickly — the risk is that crude oil continues to extend its gains toward the $119.48 high of early March," IG market analyst Tony Sycamore said in a note on Sunday.

Prospects for an early diplomatic opening dimmed later in the day. Oman's Foreign Minister Badr Albusaidi said on X that a meeting scheduled for Monday in Oman between Gulf countries and Iran to discuss the Strait of Hormuz had been postponed. No new date was announced.

Oil markets have been volatile for several weeks, with traders weighing supply risks against demand conditions. Prices are being driven mainly by expectations about whether crude can keep moving freely through the Gulf and along Saudi Arabia's export routes. Shipping and insurance costs in the region typically react first to any perceived threat to tanker traffic, and those movements then feed into the broader price of crude.

Governments in the region and major importing countries are monitoring the situation. Analysts caution that much depends on events in the coming days, including whether the postponed Oman talks are rescheduled and whether the East-West pipeline resumes operations. Until then, the price of oil is likely to remain sensitive to each new report from the Gulf.