Iran blockade and Saudi pipeline attack push Brent crude toward $110 per barrel

U.S. sanctions that have halted Iranian crude shipments through the Strait of Hormuz and a recent drone attack that severely damaged Saudi Arabia's East-West Pipeline are tightening oil supplies worldwide. The pipeline, which moves between 2.6 million and 4 million barrels per day, is expected to be out of service for three to five weeks while repairs are carried out.

At the same time, Iran-backed Houthi forces have taken additional territory around the Bab el-Mandeb Strait, a key Red Sea chokepoint, further constraining shipping routes.

U.S. diesel prices reached a record average of $6.23 per gallon, with regular gasoline averaging $4.32, as Brent crude rose to roughly $110 a barrel during the day.

"There are a series of indications that the pressure is working," said Miad Maleki, a senior fellow at the Foundation for Defense of Democracies, referring to the combined effect of sanctions, the naval blockade and diplomatic isolation on Iran's economy.

Iran's crude exports have fallen sharply, with daily loadings dropping to about 220,000-255,000 barrels in August, down from 740,000 barrels in July. The reduction reflects the U.S. naval blockade imposed on July 14, which has prevented Iranian cargoes from reaching China, its largest remaining oil customer.

Analysts note that while Tehran continues to support the Houthis, it does not exercise direct operational control over the group, and the Houthi-Saudi conflict has its own dynamics.

"Iran has realized that some of the leverage it has over the threat of Hormuz is gone," said Iran expert Arash Azizi. He added that Tehran is seeking a negotiated settlement that would end the war and allow reconstruction, rather than opening a new front in the Red Sea.

The ongoing disruptions highlight the broader impact of regional tensions on global energy markets and consumer prices.