Oil Prices Top $108 as Saudi Pipeline Shuts After Drone Strikes

Oil prices have climbed sharply above $108 a barrel after drone strikes launched from Iraqi territory damaged Saudi Arabia's key east-west pipeline, forcing its temporary shutdown. The attacks, which Saudi officials linked to Iran-backed militants, struck pumping stations in the Riyadh and Medina regions and left extensive fire damage visible in satellite images. Riyadh now relies on limited stockpiles at the Red Sea port of Yanbu to sustain exports, with those reserves expected to last only five to seven days if the line stays closed.

The pipeline normally moves up to 7 million barrels a day around the closed Strait of Hormuz. Its loss compounds existing disruptions from seven months of fighting between the United States and Iran. Brent crude gained more than 3 percent in early trading, while US West Texas Intermediate futures rose to $103 a barrel. Diesel prices in America have already hit record levels above $6 a gallon, adding pressure on truckers, farmers and households already facing higher energy costs.

President Trump stated that American forces are escorting oil tankers through Hormuz and have restored flows to roughly two-thirds of pre-conflict levels. Iranian officials dispute those claims and reported downing a US MQ-1 drone over the strait. Separate Houthi advances in Yemen have secured the island of Perim at the Bab al-Mandeb strait, further threatening Red Sea shipping routes. A planned diplomatic meeting in Oman between Iran and Gulf states was postponed after the pipeline strikes.

Trump also pressed Ukrainian President Volodymyr Zelenskyy to halt strikes on Russian oil refineries, arguing that those attacks are worsening global diesel shortages. He noted that the supply squeeze stems as much from the Russia-Ukraine conflict as from Middle East fighting. Ukrainian officials have treated Russian energy facilities as legitimate targets amid their own winter energy concerns.

The combination of closed pipelines, contested chokepoints and simultaneous wars has left markets tighter than officials acknowledge. American drivers and businesses absorb the direct cost while officials juggle multiple fronts with no clear end in sight.