Crude oil prices jumped sharply on Sunday after Saudi Arabia shut down a critical pipeline that can bypass the Strait of Hormuz, following a drone attack that damaged the infrastructure. US crude futures rose 3.23% to $103.28 a barrel, while international benchmark Brent crude climbed 3.36% to $108.13 a barrel, as of 3:41 a.m. Eastern Time. The attack, carried out by a drone launched from Iraq on Thursday, forced the Saudi government to halt operations along this key artery for crude transportation. Riyadh has yet to disclose the extent of the damage or how long the pipeline will remain out of service.

This East-West pipeline, with a daily capacity of 7 million barrels, plays a crucial role in mitigating severe oil supply disruptions caused by the war with Iran. Stretching across Saudi territory, it connects oil-producing areas along the Persian Gulf coast with crude export terminals on the Red Sea. As Iran and the United States vie for control over the Strait of Hormuz, Saudi Arabia has relied on this pipeline to route its crude exports away from the Gulf. Saudi Aramco Chief Executive Officer Amin Nasser noted during an August earnings call that this pipeline has been more instrumental in stabilizing the oil market than the large-scale release of strategic petroleum reserves led by the United States.

Following the pipeline attack, a diplomatic meeting originally scheduled for Monday in Oman between Iran and Gulf Arab states to discuss the situation in the Strait of Hormuz was abruptly postponed. Omani Foreign Minister Badr al-Busaidi stated on social media platform X on Sunday: "To reach a consensus, the regional meeting scheduled for tomorrow in Salalah has been postponed. We remain committed to dialogue, maintaining regional stability, and fostering long-term cooperation." The Joint Maritime Information Center (JMIC) reported in its warning bulletin No. 096 that the security situation in the Strait of Hormuz remains precarious, with another tanker attacked on Sunday and a fire breaking out on board.

Saudi Arabia has faced a series of attacks from Iran-affiliated groups in recent days. According to the Saudi Press Agency, Yemen's Houthi rebels struck Saudi energy facilities and other civilian targets earlier last week, injuring more than 70 people. Reports indicate that after seizing the port of Mokha on Yemen's west coast, the Houthis also captured strategic islands in the Bab el-Mandeb Strait. These military advances have strengthened the group's position, enhancing its ability to disrupt oil transport routes through the Bab el-Mandeb, which connects the southern Red Sea to global markets. The Houthis announced a maritime blockade against Saudi Arabia back in July.