Crude oil climbed above $105 per barrel on Tuesday, its highest level in more than four months, amid intensifying supply disruptions in the Middle East and renewed setbacks to Libyan production. Saudi Arabia shut its East–West pipeline after attacks originating from Iraqi territory. The strikes halted operations on infrastructure that had been transporting 7 million barrels per day of Saudi crude to the Red Sea—an alternative route to shipments through the Persian Gulf, which remain blocked by Iran’s tanker embargo.
The extended disruption to tanker traffic from the region has forced major OPEC producers to scale back output, with Saudi production recently falling to its lowest level since 1990. At the same time, Libya has suspended operations at several oil fields and warned it may declare force majeure, after protests by the Petroleum Facilities Guard shut down the Hamada–Zawiya crude-loading pipeline.
Declining oil inventories in China have prompted the world’s largest importer to increase its orders in August, while the US Strategic Petroleum Reserve remains near a record low.
