Brent crude oil prices reached $107.05 per barrel, indicating a 1.3% increase from the previous day. Additionally, WTI crude oil prices rose by 1.51% to $102.92 per barrel. These changes occurred following disruptions caused by attacks on Saudi Arabia's energy infrastructure and the halt of the East-West pipeline in the country.
Reasons for the Increase in Oil Prices
Tim Waterer, senior market analyst at KCM Trade, pointed to the impacts of any new conflict and attacks on energy infrastructure, stating that these are perceived as threats to oil supply. Traders are monitoring any signs of normalization in the East-West pipeline operations in Saudi Arabia as well as oil flows from the Strait of Hormuz. The Strait of Hormuz, as one of the main passages for global crude oil, has raised concerns in the market due to traffic disruptions.
Read more: 7% Increase in OPEC Oil Prices to $114.89 in the Past Five Days
Impact of Disruptions on Global Oil Supply
Saudi Arabia, as the world's largest oil exporter, uses the East-West pipeline to transport about 4 million barrels of oil daily, which accounts for 4% of global oil supply. According to Saudi buyers and traders, if the halt of this pipeline continues, the country’s oil storage will quickly deplete, which could lead to a maximum 4% reduction in global oil supply. These concerns have driven up demand and prices in global markets.
Analysts at ING noted in a report that there are still many uncertainties regarding the extent of damage and the duration of the East-West pipeline's halt. Until the situation with this pipeline is clarified, prices are expected to continue facing further increases.
Read more: Oil Tanker Rates Reached Their Highest Level · Significant Decrease in Ship Traffic in the Strait of Hormuz to 14 Vessels
