Saudi East-West Pipeline Shutdown Persists as WTI Nears $102, Brent Tops $105

Saudi Arabia’s key East-West crude pipeline remained shut, extending the rally in global oil prices as concerns over Middle East supply disruptions persisted.

Bloomberg reported on September 14 that West Texas Intermediate rose to near $102 a barrel after gaining more than 1% a day earlier. Brent crude also finished above $105 a barrel.

The continued shutdown of Saudi Arabia’s East-West pipeline has been a key driver of the advance. The pipeline, a major crude transport route that bypasses the Strait of Hormuz, was closed after coming under attack last week, and Saudi Aramco has not said when operations will return to normal. Saudi Arabia is also reported to be seeking to boost crude exports through the Strait of Hormuz to make up for the disruption.

Tensions around the Strait of Hormuz have also continued. Iran’s Fars News Agency, citing the Revolutionary Guard navy, reported that a very large crude carrier attempting to pass through a restricted zone struck a mine and exploded. US Central Command rejected the claim as false.

Prospects for US-Iran negotiations also appeared mixed. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Tehran would not negotiate with Washington until its conditions were met. By contrast, President Donald Trump said Iran “wants a deal quickly and badly,” signaling the possibility of progress in talks.

“The oil market is caught between the reality of shrinking supply and comments suggesting a possible easing of tensions,” Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, said. Ultimately, she said, the market will place more weight on actual oil supply and infrastructure conditions than on rhetoric.

Supply concerns were also evident in the futures market. The spread between front-month WTI and the next contract widened to a backwardation of $4.44 a barrel. That marked a sharp increase from less than $1 about a month earlier, reflecting worries about tight near-term crude supply.

As the US-Iran conflict spread across key oil-producing areas in the Middle East, international crude prices have surged about 80% this year. The resulting inflation pressure also pushed the yield on the 10-year US Treasury above 5% for the first time since 2023.