New Gulf Attacks and Saudi Pipeline Shutdown Deepen Oil Supply Fears

Fresh attacks on shipping in the Gulf and on Saudi infrastructure have intensified concerns over global energy supplies, after a drone strike shut down a major Saudi oil pipeline and Yemen's Houthis pressed further along the Red Sea coast.

On Sunday, the British maritime security agency UKMTO reported that a vessel was hit by a projectile while transiting the Strait of Hormuz, sparking a fire and forcing the crew to abandon ship. Iran separately said one person was killed and four crew members wounded when an Iranian commercial vessel was struck off its coast.

In southern Saudi Arabia, state media broadcast footage of damage to homes and a mosque in Jazan province following what was described as the latest cross-border attack by the Houthis. The group also claimed to have hit a Saudi military base in a neighbouring province. Southern Saudi cities have been on regular alert since last week.

Friday's drone strikes disabled the 1,200-km east-west pipeline that carries Saudi oil across the Arabian Peninsula, a route that allows exports to bypass the Strait of Hormuz. The same day, Houthi forces captured Perim Island, which sits in the Bab El-Mandeb strait at the mouth of the Red Sea.

Oil prices had already climbed above $100 last week for the first time since July, and the retail price of diesel in the United States reached another record high above $6.20 a gallon on Sunday. Traders and Saudi buyers said the kingdom has enough crude stored at its Red Sea port of Yanbu to sustain exports for only five to seven days if the pipeline remains offline. Beyond that, as much as 4% of global oil supply could be at risk, on top of volumes already lost to disruption in the Strait of Hormuz.

Saudi Arabia has not disclosed the full extent of the pipeline damage or how long repairs will take, with estimates ranging from days to weeks. Satellite imagery has shown large smoke plumes along the pipeline route.

Diplomatic efforts are also in motion. Iranian officials say they will attend a meeting with Gulf Arab states in Oman on Monday to present an agreement they say has been reached with Oman on future shipping routes through the strait. Few details have emerged, and Oman has not publicly confirmed the meeting or any deal. Iraq plans to send a delegation, while Bahrain has said it will not meet with Iranian representatives. A senior Iranian official indicated the talks would likely not produce a signed agreement to reopen the strait. Iran's foreign minister, Abbas Araqchi, said Tehran would not reopen the strait until the United States meets its demands.

The Houthi advances present a new challenge for Washington. The United States has yet to achieve the objectives set out when President Donald Trump launched "Operation Epic Fury" in February: ending Iran's nuclear programme, preventing it from attacking its neighbours, and creating conditions for its people to topple their rulers. Iran, despite military and economic losses, hopes to emerge stronger and to collect fees from ships using the strait.

Three sources said Saudi Crown Prince Mohammed bin Salman called Trump on Thursday to request military assistance against the Houthis, but was offered only intelligence support for now. Trump confirmed on Saturday that he had spoken with the crown prince and said the Houthis had also contacted his administration, asking Washington to stay out of the Yemen war.