Oil Prices Rise as Iran Talks Postponed and Saudi Infrastructure Attacked

Oil prices rose in early trading on Monday following the postponement of talks between Iran and the Arab Gulf states and an attack on critical Saudi oil infrastructure. Brent crude increased by 3.2 percent to $108, while West Texas Intermediate rose by 3.3 percent to $103. The Saudi Oil Ministry announced the temporary closure of the East-West Pipeline, a key oil artery transporting about 7 million barrels per day, after it was hit by drones launched from Iraq. The attack damaged the 1,200km-long pipeline in eight places, with no indication of when normal operations will resume. The incident coincided with advances by the Houthi militia in Yemen, tightening their grip on the Bab al-Mandab Strait and supporting their campaign to disrupt Saudi oil exports. Meanwhile, diplomatic talks scheduled in Oman between Iran and the Arab Gulf states were postponed, with no official reason given, although Bahrain had previously withdrawn citing the recent attacks. Attacks on shipping in the Strait of Hormuz continued, with reports of a ship hit by projectiles over the weekend. Physical oil markets have faced increased pressure recently, with demand from Asian markets rising, although China's imports remain down compared to last year.