Oil Settles Above $100 as Saudi Supply Route Faces Shutdown

Brent crude briefly approached $110 a barrel on Monday before surrendering much of its advance, a sign that traders are pricing an immediate supply squeeze while still watching for diplomatic relief.

The international benchmark settled at $105.68 a barrel on September 14, up $1.07, or about 1%, while West Texas Intermediate gained $1.34 to $101.39. Both contracts had climbed almost 5% earlier in the session before pulling back after President Donald Trump said Iran wanted to reach a deal with Washington.

Fortune’s 9 a.m. Eastern snapshot placed Brent at $110.42, up 79 cents from the previous morning and roughly 64% above its level a year earlier. That gap between the morning quote and the official settlement captures the day’s volatility, with prices reacting in real time to military developments, shipping risks and diplomatic headlines.

The immediate trigger was a fresh series of attacks on Saudi energy infrastructure, including damage that left the kingdom’s East-West pipeline offline. The route is strategically important because it gives Saudi Arabia an alternative path to move crude toward the Red Sea when shipments through the Persian Gulf become difficult. Its closure has raised questions about how quickly Saudi inventories can compensate if repairs stretch beyond several days.

Shipping is the other pressure point. Reuters reported that vessel traffic through the Strait of Hormuz fell below 10 transits a day over the weekend, compared with a recent 10-day average of 14. The waterway typically carries about one-fifth of global oil supplies, making even a partial slowdown consequential for refiners and fuel buyers.

The market was already operating with little room for error. The U.S. Energy Information Administration said crude production shut-ins averaged 6.7 million barrels a day in August, up from 5 million in July, while flows through Hormuz and the Bab el-Mandeb remained constrained. It expects Middle East disruptions to persist through the fourth quarter.

For consumers, the shock will arrive unevenly. Crude often represents more than half of the retail gasoline price, but refinery margins, taxes and distribution costs determine how quickly a futures rally reaches the pump. The sharper risk is diesel, where freight, agriculture and industrial users feel higher costs first.