Oil Prices Surge Past $108 Amid Saudi Pipeline Attacks, Fueling Inflation Fears

Global oil prices have climbed sharply, with Brent crude exceeding $108 a barrel, following drone attacks on critical infrastructure in Saudi Arabia. The strikes forced the closure of the kingdom's vital east-west crude pipeline, raising concerns about significant disruptions to energy supplies from the Persian Gulf. These attacks, attributed to Iran-linked Houthi rebels, also saw the capture of a strategic island in the Bab al-Mandab strait, further intensifying supply worries.

The escalating oil prices are contributing to broader economic anxieties, pushing key U.S. Treasury yields toward 20-year highs. Investors are increasingly concerned about energy-driven inflation, which is impacting bond markets and contributing to a sell-off in U.S. government borrowing costs. The cost of filling vehicles with petrol and diesel has already rebounded to its highest levels since 2022, reflecting the immediate impact of the rising crude prices on consumers.