Middle East tensions jolted energy markets on Monday as a planned round of regional diplomacy was put on ice and new attacks threatened the two waterways and corridors most critical to global oil trade.
Oil prices climbed more than 3% after Houthi strikes on Saudi Arabia, the world’s biggest exporter, prompted the weekend closure of its key 1,200km east-west pipeline, while Iranian attacks on ships in the Gulf added to fears of further supply disruption.
Any near-term hope of a diplomatic opening dimmed late Sunday when Oman’s foreign minister, Sayyid Badr Albusaidi, said on social media that a regional meeting due to take place today had been postponed “in the interests of consensus.”
Iranian officials had previously indicated they would join Gulf Arab states at the gathering to discuss an agreement with Oman on governing shipping routes through the Strait of Hormuz, which carried about a fifth of global oil supplies before the war.
Iran’s Fars news agency, citing an Iranian foreign ministry official, reported that the session was delayed at the request of some regional countries, in a decision made jointly by Tehran and Muscat.
According to the official, Iran will work with Oman to set a new date for the talks.
The postponement followed Saudi Arabia’s decision to halt—at least temporarily—the pipeline that has served as the primary route for moving Middle East oil while bypassing the Strait of Hormuz.
At the same time, the strait remained a flashpoint for maritime risk. The British maritime security agency UKMTO said a vessel moving through the Strait of Hormuz was hit by a projectile, sparking a fire and forcing the crew to evacuate.
Iran said one person was killed and four crew members were wounded aboard an Iranian commercial vessel struck off its coast.
Ship tracking data released today showed commodity vessel transits through the Strait of Hormuz dropped to single digits per day over the weekend, a sharp fall from the 10-day average of 14.
Those figures do not include ships that may have crossed with their Automatic Identification System transponders switched off to avoid detection.
Damage caused to the East-West pipeline pumping station in Saudi Arabia
US diesel hits another record
Oil prices pushed above $100 (€86.54) last week for the first time since July. In the United States, the politically sensitive retail price of diesel rose yesterday to a fresh all-time high, topping $6.20 (€5.37) a gallon.
Traders and Saudi oil buyers said Riyadh has sufficient crude stored at its Red Sea port of Yanbu to keep exports flowing for only five to seven days if the pipeline hit on Friday remains offline.
Beyond that window, as much as 4% of global oil supply could be put at risk, on top of the millions of barrels a day already lost amid the disruption to traffic through the Strait of Hormuz.
Saudi Arabia has not provided full details on the damage to the pipeline or how long it expects the route to remain out of service.
Estimates from sources have varied widely, from days to weeks. Satellite imagery has shown large columns of smoke rising from points along the pipeline.
The surge in violence linked to the war launched six months ago by the United States and Israel comes after a comparatively quiet August, when Middle East oil flows had begun to edge back up.
Speaking to the London-based pan-Arab outlet Al-Arabi Al-Jadeed, Iran’s Foreign Minister Abbas Araqchi said that even with an agreement with Oman, Iran would not reopen the strait until the United States meets Tehran’s demands.
The U.S. has so far failed to deliver on the objectives President Donald Trump laid out when he launched “Operation Epic Fury” in February: ending Iran’s nuclear programme, stopping it from being able to attack its neighbours, and creating conditions for its people to overthrow their rulers.
During a weekend trip to Ireland that included attending the Irish Open golf tournament, Trump repeated that he still expects the Iran war to end this year—possibly just after US midterm elections in November—and said gasoline prices would then “drop like a rock.”
Houthi attacks continue
In Saudi Arabia, state media released footage showing damage to homes and a mosque from the latest purported cross-border attack by Yemen’s Iran-aligned Houthi rebels in the southern province of Jazan.
The Houthis separately said they struck a Saudi military base in a neighbouring province after capturing Perim Island in Bab El-Mandeb, the “Gate of Tears” strait that controls access to the Red Sea.
The push along the Red Sea coastline marks the largest flare-up of fighting in Yemen in years.
That advance—and the accompanying strikes on Saudi Arabia—has presented Washington with a fresh dilemma: how to back its Saudi partners and safeguard shipping lanes while avoiding a new front in the conflict.
For Gulf states, the Houthi campaign has sharpened a difficult choice between absorbing escalating economic pain or engaging with Iran.
The United States bombed the Houthis for two months in 2025, but Trump ended the operation after saying the group had withdrawn a threat to attack Red Sea shipping.
Three sources said Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, called Trump last week to request military assistance against the Houthis, but was offered only intelligence support for now.
Trump said on Saturday that he had spoken with the crown prince, and added that the Houthis had also contacted the US administration to ask Washington to stay out of the Yemen war.
