Oil prices rose sharply on Tuesday after the suspension of crude loadings at Saudi Arabia’s Red Sea terminal at Yanbu and the cancellation of some cargoes to European customers deepened fears that a crucial export disruption could last for weeks.
Brent crude settled $3.07 higher, or 2.9%, at $108.75 a barrel. US West Texas Intermediate gained $4.44, or 4.38%, to $105.83. Both benchmarks reached their highest closing levels since May 19, according to Reuters market data.
The price move reflects more than a single damaged pipeline. The East-West route had become a central alternative to the Strait of Hormuz after conflict sharply reduced traffic through the waterway. Its loss removes part of the redundancy that normally allows producers and traders to reroute supplies when one corridor is threatened.
Why the East-West pipeline matters
Saudi Arabia’s East-West pipeline carries crude roughly 1,200 kilometres from the kingdom’s producing region near the Gulf to Yanbu on the Red Sea. From there, cargoes can head towards Europe through the Suez Canal or south towards Asian markets without first crossing Hormuz.
The US Energy Information Administration describes Hormuz as one of the world’s most important oil chokepoints. Its latest full chokepoint assessment estimated average flows of 20.9 million barrels a day in the first half of 2025—about one-fifth of global petroleum-liquids consumption and one-quarter of maritime oil trade.
Saudi Arabia and the United Arab Emirates have the main operational pipelines able to bypass the strait. The EIA estimated their combined bypass capacity at about 4.7 million barrels a day. That capacity is valuable precisely because it is limited: it can cushion a disruption, but it cannot replace all the oil that would normally pass through Hormuz.
The Associated Press reported that 2.6 million to 4 million barrels a day had recently been moving through the East-West line and Yanbu. At the top of that range, the threatened volume would equal roughly 4% of global supply. Estimates of repair time vary, and they should be treated as provisional while damage assessments continue.
Why WTI rose faster than Brent
The larger gain in the US benchmark is one signal of how traders are adapting. If Saudi cargoes for Europe are delayed or cancelled, refiners may look for alternative barrels from the United States and elsewhere. Expectations of additional demand for US crude can lift WTI relative to Brent even though the disruption is centred in the Middle East.
This does not mean physical supply has already fallen by the maximum amount discussed by analysts. Futures prices incorporate expectations about future availability, inventories, shipping, insurance and the probability of further attacks. They can retreat rapidly if the pipeline resumes or diplomacy reduces the risk premium.
But the market has little reason for complacency. Reuters reported that vessel traffic through Hormuz fell to four commodity ships on Monday, compared with 10 a day earlier and a much higher pre-war norm. Yanbu loadings were suspended, while disruptions in Libya and attacks on Russian and Ukrainian energy infrastructure added pressure in other parts of the system.
The inflation channel
Higher crude prices do not pass through to consumers instantly or uniformly. Refinery margins, taxes, currency movements and local inventories all influence the price of petrol, diesel and heating fuel. The effect is often fastest where import dependence is high and subsidies are limited.
Diesel is particularly important because it powers freight, farm machinery and industrial equipment. A sustained increase raises transport and production costs well beyond the energy sector. Companies may absorb part of that increase, but prolonged pressure eventually reaches profit margins or consumer prices.
That is why the oil shock is also a monetary-policy story. Central banks focus on underlying inflation, but a large energy increase can lift headline prices, affect expectations and make wage negotiations more difficult. It can also weaken growth by reducing household purchasing power—an uncomfortable combination for policymakers deciding whether to raise or cut interest rates.
What could calm the market
The first variable is the repair timetable. US Energy Secretary Chris Wright said on Tuesday that oil should be flowing through the East-West pipeline within days, while private estimates cited by Reuters ranged from a quick restart to several weeks. Evidence of renewed throughput and normal loadings at Yanbu would be more conclusive than any forecast.
The second is shipping through Hormuz. A sustained recovery in vessel movements would restore another outlet, although shipowners would still price security and insurance risks. The third is whether other producers can add exportable supply quickly enough and whether governments release emergency stocks.
Demand also matters. Prices can stay high during a supply squeeze even as consumers reduce use, but a weaker global economy eventually limits how much crude refiners need. The immediate balance is unusually dependent on infrastructure and security developments rather than ordinary seasonal demand.
What to watch next
Traders will track pipeline repairs, Yanbu cargo schedules, Hormuz traffic and any official changes to production or strategic-stock policy. Diesel margins deserve separate attention because a shortage of refined products can hurt households and industry even when crude availability improves.
The key distinction is between a temporary price spike and a lasting reduction in available supply. Tuesday’s settlement shows that markets are assigning a larger probability to the second outcome. The next physical cargoes—not the round number on a futures screen—will determine whether that judgment was justified.
Sources and methodology
ASTER used Reuters’ September 15 market report for settlement prices, cargo cancellations and contemporaneous shipping information; the Associated Press for an independent reconstruction of the East-West pipeline disruption; and the US Energy Information Administration’s March 2026 chokepoint analysis for structural flow and bypass-capacity data. Forecasts and repair estimates are identified as estimates rather than established outcomes.