Brent crude jumped as much as 5% to $109.80 a barrel after Saudi Arabia shut its East-West pipeline following a drone attack, then pulled out of a regional meeting meant to ease tensions over the Strait of Hormuz. The kingdom's withdrawal, plus a fresh Houthi strike on a Saudi airbase, pushed diplomacy further off track even as U.S. President Donald Trump said Iran wants a deal.
Pipeline shutdown sends Brent past $109
Saudi Arabia shut its East-West pipeline late Friday after a drone attack from Iraq, where Iran-backed Shia militias and Iran's Revolutionary Guards are active, damaged the route. The pipeline carries crude from the kingdom's eastern oil fields to its west coast, a path that became critical after Iran throttled shipping through the Strait of Hormuz.
Brent, the international oil benchmark, rose as much as 5% to $109.80 a barrel on Monday before easing back to trade around $107.60.
Traders said a prolonged shutdown of the pipeline could cut off as much as 4% of global oil supply. Prediction-market pricing now points to a 15.5% chance crude sets a new all-time high by the end of December, up from before the attack.
The U.S. retail price of diesel also climbed, hitting a new all-time high above $6.23 a gallon.
Riyadh pulls out of Hormuz talks
Saudi Arabia then withdrew from a meeting scheduled for Monday in Salalah, Oman, where Iranian and Gulf foreign ministers were due to discuss a deal between Tehran and Muscat on temporarily managing shipping through Hormuz. Two people familiar with the matter said Riyadh objected to language in a draft statement prepared by Oman and Iran, fearing it would let Tehran exert control over the strait and eventually charge ships fees.
Bahrain had already said on Saturday it would not attend, and the pipeline strike plus a wave of Houthi attacks on Saudi energy infrastructure last week were cited as additional factors behind the postponement. The gathering would have been the first time all six Gulf Cooperation Council members sat down with Iran in almost two years.
Oman's foreign minister, Badr Albusaidi, said the meeting was postponed in the interests of consensus, and Iran's foreign ministry said the delay came at Saudi Arabia's request.
Houthis strike again as Trump signals opening
The Houthis said they fired dozens of missiles and drones at a military airbase in Khamis Mushait in southern Saudi Arabia on Monday, targeting aircraft hangars, radar systems, runways and ammunition depots in retaliation for Saudi airstrikes in Yemen. Saudi authorities issued emergency alerts in the area and three other southern cities previously hit by Houthi fire.
Iran, meanwhile, published an expanded list of 77 non-compliant vessels it said face fines, detention or confiscation on future passages through Hormuz, most of them owned by Gulf states or used to shuttle oil through the strait.
Yet Trump struck a different note on Monday, writing on Truth Social that Iran wants a deal: "The failing Nation of Iran wants to make a deal, quickly and badly." He added that Washington would decide whether to engage. Trump has said he expects the Iran war to end shortly after November's U.S. midterm elections, after which he expects oil prices to fall sharply.
Sources: Financial Times, Reuters via Investing.com, Crypto Briefing
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