International oil prices jumped sharply when ASIan markets opened on Monday (September 14), after a major crude oil pipeline in Saudi Arabia was forced to shut down following an attack. The pipeline had been used to bypass the Strait of Hormuz during the US-Iran conflict, and its disruption has further worsened the already tight global energy supply situation.

Brent crude futures rose $3.62, or 3.46%, to settle at $108.23 per barrel. US WTI crude futures climbed $3.15, or 3.15%, to $103.20 per barrel.

Saudi Arabia said late on September 11 that it had suspended operations of the East-West Pipeline as a precautionary measure after an attack the previous day. There are currently no signs indicating when the pipeline can resume operation.

Sudden Disruption of Critical Alternative Route

This East-West Pipeline is especially important under the current circumstances.

As Tehran and Washington engage in fierce rivalry over control of the Strait of Hormuz, the pipeline has become a vital alternative route to sustain Saudi oil exports.

When shipping through the Strait of Hormuz is disrupted, Saudi Arabia can use this cross-country pipeline to transport crude oil from its eastern oilfields to ports along the Red Sea coast, thus avoiding the Strait of Hormuz.

The pipeline has a capacity of approximately 7 million barrels per day. Therefore, this shutdown has further stoked market concerns over global crude oil supply.

On the diplomatic front, Oman’s Foreign Minister Badr Albusaidi stated that a meeting between Iran and several Gulf states originally scheduled for later on Monday has been postponed. The meeting was intended to discuss establishing a temporary shipping corridor in the Strait of Hormuz.

Earlier, Bahrain announced it would not attend the meeting, partly citing the attack on the Saudi East-West Pipeline. Axios also reported that Riyadh maintains reservations about the relevant plan.

Alarm Sounded at Another Major Oil Chokepoint

Meanwhile, traders are assessing the regional spillover effects of the rapidly deteriorating situation in Yemen.

Iran-backed Houthi forces have advanced rapidly along Yemen’s Red Sea coast recently, which may enable the group to further strengthen its control over shipping in the Bab el-Mandeb Strait.

The Bab el-Mandeb Strait is another critical maritime energy chokepoint worldwide.

This means that while the Strait of Hormuz remains caught in US-Iran military posturing, the Bab el-Mandeb Strait connecting the Red Sea and the Gulf of Aden is facing heightened shipping risks.

The global energy market is thus confronted with a more dangerous scenario: disruption at the Strait of Hormuz, shutdown of Saudi Arabia’s onshore alternative oil pipeline, and rapidly rising risks at the Bab el-Mandeb Strait on the Red Sea route.

Oil Prices Have Surged 76% in 2026

As the US-Iran conflict spreads across the region, oil exports are restricted and global shipping markets are thrown into disarray. International crude oil prices have risen by a cumulative 76% since the start of 2026.

The protracted crisis is delivering a new inflationary shock to the global economy, with prices of crude oil, natural gas and refined products such as gasoline and diesel climbing across the board.

Data released by the US last week showed that price gains widened further in August, boosting the odds of a Fed rate hike.

In other words, the Middle East energy crisis is no longer merely an issue for the oil market. Sustained high oil prices may transmit to the global economy via transportation, manufacturing and consumer sectors, renewing inflationary pressure on central banks around the world.

Iraq Steps in for Investigation, US Prepares Additional Sanctions

Iraq has also taken action to contain the fallout from the attack on Saudi Arabia’s key oil pipeline.

Investigations found that the attack targeting the pipeline was launched from Iraqi territory.

At the same time, US Treasury Secretary Scott Bessent said on September 10 that he would announce sanctions against a large bank on Monday as part of Washington’s campaign to force Tehran into concessions.

In parallel, the US Navy is enforcing a blockade of Iranian ports in an attempt to further restrict the country’s energy exports.

Against the backdrop of ongoing US-Iran conflict and disrupted shipping in the Strait of Hormuz, the Saudi East-West Pipeline originally served as an important "safety valve". Now this onshore route with a maximum capacity of roughly 7 million barrels of crude per day has been forced to shut down, pushing up risks facing the global oil supply system.

More alarmingly, if three critical nodes — the Strait of Hormuz, the Saudi East-West Pipeline and the Bab el-Mandeb Strait — suffer severe disruptions simultaneously, the market focus may shift from simply asking "how much higher can oil prices go" to whether there will be a serious physical shortage of global crude supplies, and how much impact a new wave of energy inflation will exert on the global economy and monetary policy.