Brent tops $108 as Gulf risks deepen
- Brent crude climbed more than 3% above $108 a barrel Monday, while WTI gained 2.3% to around $102.
- Saudi Arabia temporarily closed its East-West pipeline following drone attacks, removing a key alternative route to the Strait of Hormuz.
- Disruptions around Hormuz and Russia are tightening fuel supplies as U.S. diesel prices climb above $6 a gallon.
Brent crude for October and November delivery rose more than 3% above $108 a barrel Monday, while U.S. benchmark WTI gained 2.3% to around $102.
The gains extended last week's advance after both benchmarks crossed $100, with traders responding to additional disruption affecting Gulf crude transportation.
Saudi Arabia temporarily closed its East-West pipeline following drone attacks, removing a route that normally allows crude to reach Red Sea export terminals without using the Strait of Hormuz.
Shipping risks remain elevated in the strait after a merchant vessel was hit Sunday, while crude flows through the waterway have fallen from roughly 20 million barrels per day before the war to about 7 million.
The supply disruption is reaching U.S. consumers, with national diesel prices exceeding $6 per gallon for the first time Friday, compared with roughly $3.71 a year earlier, while petrol averaged $4.22.
President Donald Trump attributed part of the diesel shortage to Ukrainian attacks on Russian refineries, although Lipow Oil Associates estimated Russia's diesel export disruption at roughly 800,000 barrels per day versus about 1.2 million from disruption around Hormuz.
Risks remain concentrated around global refining and shipping capacity, with the two conflicts disrupting refineries representing roughly 5 million barrels per day of capacity as diplomatic talks over the Strait of Hormuz remain postponed.
