Oil Prices Surge as Saudi Pipeline Shutdown and Red Sea Risks Mount

October West Texas Intermediate jumped $3.30 to reach $104.69, while November ICE Brent crude climbed to $107.80. The rally extended to refined products, with the October ULSD contract rising 27.21 cents to $5.2336 per gallon as U.S. retail diesel prices hit a record $6.27 per gallon.

Damage to the 750-mile East-West Pipeline could slash exports from the port of Yanbu by up to 2.7 million barrels per day. While Saudi officials aim to restore partial operations shortly, repairs to damaged pumping stations may take up to two months. The situation is further strained by the reported Houthi seizure of Perim Island and a strike on the 400,000 barrel-per-day YASREF refinery. Compounding these regional anxieties, an overnight drone strike targeted Russia’s 160,000 barrel-per-day Syzran facility, leaving markets on edge ahead of the winter heating season.