Oil supply risks rose after a projectile struck a vessel in the Strait of Hormuz and Saudi Arabia temporarily closed its East-West pipeline following a drone strike, according to the UK Maritime Trade Operations agency and Saudi authorities.
The UK agency reported on Sunday that the projectile hit a ship transiting the strait, but did not immediately reveal the extent of the damage or the condition of the crew. The incident followed Saudi Arabia's Saturday closure of the 1,200-kilometer East-West pipeline after a drone strike that Saudi Arabia and Iraq said originated in Iraq, where Iran-backed militias operate. Saudi authorities reported injuries and damage but did not detail the effect on oil exports.
The pipeline carries an estimated 4 million to 5 million barrels per day, equivalent to roughly 4% to 5% of global oil supply. Brent crude had surged back above $100 a barrel last week. The Strait of Hormuz has been largely closed by the war over the past six months.
The latest incidents came as hostilities widened in the Red Sea. On Friday, Iran-aligned Houthi forces seized Perim, a strategic Yemeni island in the Bab el-Mandeb strait at the entrance to the Red Sea, according to four Yemeni government sources. On Thursday, Saudi Crown Prince Mohammed bin Salman asked U.S. President Donald Trump for military assistance against the Houthis. Washington declined direct intervention for now but offered intelligence support. Trump confirmed the conversation and said the Houthis had contacted his administration asking the United States not to enter the conflict directly.
Talks are set to take place on Monday, when Iran is scheduled to meet Gulf Arab states in Oman to discuss the future of the Strait of Hormuz. A proposed arrangement covering shipping routes is expected to be presented. A senior Iranian official played down the prospects for a breakthrough, and Ebrahim Azizi, chief of Iran's parliamentary national security committee, said negotiations would have little value until Washington accepts Tehran's conditions. Iran has indicated the strait will not fully reopen until its conditions are met.
