Crude oil climbed above $103 per barrel on Monday, its highest level in four months, as escalating supply disruptions in the Middle East linked to the war in Iran tightened global markets. Saudi Arabia was forced to shut its East–West pipeline after attacks launched from Iraqi territory. The strikes halted operations at infrastructure that had been routing 7 million barrels per day of Saudi crude to the Red Sea—an alternative export route after shipments through the Persian Gulf were suspended by Iran’s blockade of GCC oil exports.
At the same time, planned talks between the GCC and Iran, intended to coordinate efforts to restore regional oil supplies, were postponed by Tehran. These developments have prolonged the shutdown of tanker traffic from the region, prompting several major producers to curtail operations. Saudi Arabia’s oil output has now fallen to its lowest level since 1990.
Falling inventories in China, the world’s largest importer, pushed Chinese buyers to increase orders in August, while the US Strategic Petroleum Reserve remains near a record low.
