Oil Jumps as Shutdown of Saudi Pipeline Deepens Energy Crisis

Oil Jumps as Shutdown of Saudi Pipeline Deepens Energy Crisis

Kanoko Matsuyama

Mon, September 14, 2026 at 1:28 AM GMT+3 3 min read

• CL=F +2.49%
• NG=F +1.17%

(Bloomberg) -- Oil advanced after Saudi Arabia shut a major crude pipeline following attacks, disrupting a route that's been used to bypass the Strait of Hormuz during the US-Iran war and deepening a global energy crunch.

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Global benchmark Brent rose toward $108 a barrel, after rallying almost 9% last week, while West Texas Intermediate was near $103. European natural gas also gained, surging as much as 3.8%. Saudi Arabia said late on Friday that it had halted the East-West pipeline as a precaution after attacks the previous day. There's been no indication of when operations will resume.

"It all boils down to the duration," said June Goh, senior oil market analyst at Sparta Commodities SA. If flows were to resume quickly, the impact should be limited as inventories at Yanbu, the pipeline's western end, could be tapped, she said. But a prolonged shutdown could force output cuts, she added.

On the diplomatic front, a meeting planned for later Monday between Iran and several Gulf nations on creating a temporary shipping lane through Hormuz was postponed, according to Oman's foreign minister, Badr Albusaidi. Earlier, Bahrain said it would not attend, citing in part the East-West pipeline strike, while Axios reported that Riyadh also had reservations about the plan.

Traders were also assessing the regional consequences of a rapid military advance by Iranian-backed Houthi militants along Yemen's Red Sea coast. The push stands to enable the group to exercise greater control over shipping through the Bab el-Mandeb strait, another vital maritime chokepoint.

Crude has rallied 77% this year, as the US-Iran conflict spread across the region, curtailing exports and pitching shipping markets into disarray. With Tehran and Washington locked in a struggle over control of Hormuz, the East-West pipeline had become a vital route to sustain export flows.

The drawn-out crisis has delivered an inflationary jolt to the global economy, forcing up prices of crude, natural gas and petroleum products including gasoline and diesel. US data last week showed price gains marched higher in August, boosting the odds of a rate rise from the Federal Reserve.

Iraq has also moved to contain the fallout from the assault on the vital Saudi Arabian pipeline — which has a capacity of about 7 million barrels a day, and ferries oil across the country to Red Sea ports — after the strikes were found to have been launched from inside the country.

In the US, Treasury Secretary Scott Bessent said last week he would announce sanctions against a major bank on Monday, as part of efforts to force Tehran to capitulate. At the same time, the US Navy is enforcing a blockade of the Islamic Republic's ports to throttle its energy exports.

Market metrics point to growing concern about near-term supplies. Brent's prompt spread — the difference between its two nearest contracts — was $5.53 a barrel in backwardation, up from $3.84 a week ago. That's a bullish pattern in which the nearer price commands a premium over the next in sequence.

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