Oil Prices Rebound as Saudi Pipeline Shutdown Raises Middle East Supply Risks

Oil prices recovered sharply in early Asian trading on Monday, September 14, following a steep decline in the previous session. Brent crude futures increased by $2.90/bbl, or 2.77%, to $107.51/bbl, while US WTI gained $2.81/bbl, or 2.81%, to $102.86/bbl.

The rebound came after Friday’s losses, when Brent settled $3.02/bbl lower at $104.61/bbl, while WTI declined $2.43/bbl to $100.05/bbl.

Saudi Pipeline Shutdown Raises Supply Concerns

The latest price recovery was driven largely by renewed concerns over Middle East oil supply after Saudi Arabia temporarily shut its East-West Pipeline as a precaution following multiple attacks on September 10.

The pipeline has a capacity of approximately 5 million bbl/day and serves as an alternative export route, allowing Saudi crude to reach terminals on the Red Sea without passing through the Strait of Hormuz.

With Saudi Arabia yet to provide a timeline for restarting the pipeline, the shutdown has added to concerns over the reliability and availability of regional crude supplies.

Hormuz and Red Sea Risks Add to Market Pressure

Market sentiment was further affected by the postponement of planned Iran-GCC discussions aimed at establishing a temporary shipping corridor through the Strait of Hormuz.

Meanwhile, increasing instability near Yemen’s Red Sea coast has raised additional concerns around shipping through the Bab el-Mandeb Strait, another important route for global energy flows.

A reported projectile strike on a vessel in the Strait of Hormuz on September 13 caused a fire and forced its crew to abandon the ship. The incident further highlighted the risks facing commercial shipping and the movement of energy supplies across the region.

With disruptions affecting multiple key routes, renewed supply concerns have provided fresh support to crude prices despite the sharp losses recorded at the end of last week.

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