Hopes for a diplomatic breakthrough in the Middle East weakened after a planned meeting between Iran and Gulf states was postponed, while fresh attacks near key oil shipping routes increased concerns about global energy supplies.
Oil prices rose more than 3% after Houthi attacks on Saudi Arabia forced the temporary closure of the kingdom’s key East-West pipeline. The 1,200km pipeline transports crude to Red Sea ports and provides an alternative route to the Strait of Hormuz.
Oman’s Foreign Minister Sayyid Badr Albusaidi said late Sunday that a regional meeting scheduled for Monday had been postponed in the interests of consensus. Iranian officials had been expected to join Gulf Arab states to discuss arrangements with Oman governing shipping through the Strait of Hormuz.
Iran’s Fars news agency quoted an Iranian foreign ministry official as saying the meeting was postponed at the request of some regional countries following a joint decision by Tehran and Muscat. The official said Iran would coordinate with Oman on a new date.
The postponement came as shipping through the Strait of Hormuz remained under severe pressure. The waterway carried about a fifth of global oil supplies before the war and has become increasingly dangerous for commercial vessels.
The UK Maritime Trade Operations agency said a vessel was struck by a projectile while travelling through the strait, causing a fire and forcing its crew to evacuate. Iran separately said one person was killed and four crew members were wounded after an Iranian commercial vessel was struck off its coast.
Preliminary ship-tracking data showed commodity vessel traffic through the strait had fallen to single digits per day over the weekend, below a 10-day average of 14. The figures do not include vessels that may have switched off their Automatic Identification System transponders.
Oil prices had already moved above $100 a barrel last week for the first time since July. In the United States, diesel prices reached another record on Sunday, exceeding $6.20 a gallon.
Saudi oil buyers and traders said the kingdom has enough crude stored at the Red Sea port of Yanbu to maintain exports for around five to seven days if the damaged pipeline remains closed. If the shutdown continues, up to 4% of global oil supply could be placed at risk, adding to losses caused by reduced shipping through Hormuz.
Saudi Arabia has not provided details about the extent of the pipeline damage or how long repairs will take. Estimates have ranged from several days to several weeks.
Meanwhile, Houthi attacks have continued in southern Saudi Arabia. Saudi state media showed damage to homes and a mosque in Jazan province, while the Houthis claimed to have targeted a Saudi military base.
The escalation is creating difficult choices for Gulf states and Washington. Saudi Crown Prince Mohammed bin Salman reportedly asked US President Donald Trump for military assistance against the Houthis, but the US initially offered intelligence support.
Trump has continued to predict that the Iran conflict will end this year, saying fuel prices could fall sharply afterward. However, the latest attacks and diplomatic delays have added fresh uncertainty to efforts to restore stable oil supplies.
