Diplomatic efforts to ease tensions in the Middle East appeared to falter on Monday as a planned meeting between Iran and Gulf Arab states was postponed, while attacks around the region’s two most important oil transit routes intensified concerns over global energy supplies.
Oil prices rose by more than 3% on Monday following Houthi strikes on Saudi Arabia, the world’s biggest oil exporter, an attack that forced the closure of the kingdom’s key 1,200-kilometre east-west pipeline, and attacks on ships in the Gulf. The developments added to concerns about the volume of oil reaching international markets.
Hopes for an immediate diplomatic breakthrough weakened after Oman’s Foreign Minister, Sayyid Badr Albusaidi, said late on Sunday that a regional meeting scheduled for Monday had been postponed “in the interests of consensus”. Iranian officials had said they would attend the meeting with Gulf Arab states to present an agreement reached with Oman on governing shipping routes through the Strait of Hormuz, which carried about a fifth of global oil supplies before the war.
Iran’s Fars news agency cited an Iranian Foreign Ministry official as saying the meeting had been postponed at the request of some regional countries in a decision jointly taken by Tehran and Muscat. The official said Iran would coordinate with Oman to determine a suitable date for the meeting.
The postponement came after Saudi Arabia shut down, at least for now, its pipeline that has served as a major route for transporting Middle Eastern oil while bypassing the Strait of Hormuz. The strait itself remained a significant risk to oil shipping. The British maritime security agency UKMTO said on Sunday that a vessel had been struck by a projectile while moving through the waterway, causing a fire and forcing its crew to evacuate.
Iran said separately that one person was killed and four crew members were wounded aboard an Iranian commercial vessel struck off its coast. Preliminary ship-tracking data showed that commodity vessel transits through the Strait of Hormuz fell to single digits per day during the weekend, well below a 10-day average of 14. The figures excluded vessels that may have crossed with their Automatic Identification System transponders switched off to avoid detection.
The disruption is already being felt in fuel markets. Oil prices surged above $100 a barrel last week for the first time since July, while the politically sensitive retail price of diesel in the United States rose on Sunday to another record, exceeding $6.20 a gallon.
Saudi Arabia’s ability to sustain exports is also under pressure. Traders and Saudi oil buyers told Reuters that Riyadh has enough oil stored at its Red Sea port of Yanbu to maintain exports for only five to seven days if the pipeline hit on Friday remains closed. After that, as much as 4% of global oil supply could be jeopardised, in addition to the millions of barrels a day already lost because of disruption to traffic through the Strait of Hormuz.
Saudi Arabia has not disclosed the full extent of the pipeline damage or how long it will remain offline. Estimates from sources cited by Reuters range from days to weeks for repairs, while satellite images have shown large columns of smoke from locations along the pipeline.
The latest escalation follows a quieter August, when Middle Eastern oil flows had begun to recover. Iran’s Foreign Minister Abbas Araqchi said in an interview with the London-based pan-Arab outlet Al-Arabi Al-Jadeed that Iran would not reopen the Strait of Hormuz until the United States met Tehran’s demands, regardless of any agreement with Oman.
Meanwhile, Houthi attacks have continued. Saudi state media released footage showing damage to homes and a mosque in Jazan province following a purported cross-border Houthi attack. The Houthis separately claimed to have struck a Saudi military base in a neighbouring province after capturing Perim Island at Bab al-Mandab, the “Gate of Tears” strait controlling the entrance to the Red Sea.
The Houthi advance along Yemen’s Red Sea coast, part of the biggest eruption of fighting in Yemen for years, presents Washington with a difficult choice. The United States wants to support Saudi allies and protect shipping but remains wary of opening another front in the war. Gulf states likewise face a choice between accepting growing economic pressure and engaging with Iran.
Three sources told Reuters that Saudi Crown Prince Mohammed bin Salman called US President Donald Trump on Thursday seeking military assistance against the Houthis, but was offered intelligence support for now. Trump later acknowledged speaking to the crown prince and said the Houthis had also contacted the US administration, asking Washington to stay out of the Yemen war.
