Oman oil price spikes to $127.62 per barrel on supply fears

Muscat: The official price of Oman oil, for delivery in next November, jumped by $5.73 per barrel to settle at $127.62 on Monday.

The monthly average price of Oman crude oil for delivery in September 2026 amounted to 76.36, marking a decline of $2.73 compared to the delivery price for August, according to Gulf Mercantile Exchange (GME), formerly known as the Dubai Mercantile Exchange (DME).

According to media reports both main crude contracts, already sitting above $100 a barrel, jumped more than three percent at one point on Monday after Riyadh shut its East-West pipeline following drone attacks by Yemen's Houthi rebels, while a merchant vessel was struck in the Strait of Hormuz.

The Houthis have been cementing their hold on the Bab Al-Mandab strait, a vital shipping corridor linking Europe and Asia that has been used as an alternative to Hormuz.

Global oil prices rose by $3.62 per barrel following attacks by the Houthis on Saudi Arabia on Sunday and reports of unidentified projectiles striking vessels in the Arabian Gulf.

According to the report, Brent crude futures rose by $3.62, or 3.46 percent, to $108.23 per barrel. West Texas Intermediate (WTI) crude futures also increased by $3.15, or 3.15 percent, to $103.20 per barrel.

“The attack and closure of the Saudi East-West pipeline rattled the oil market and keep prices well supported. The pipeline is a pivotal part of compensating the reduced flows via Hormuz,” said Norbert Rücker, Head of Economics & Next Generation Research, Julius Baer. 

“The event lifts the uncertainty on supply trends and price path going forward. That said, there are few signposts for orientation. Egypt offers a reliable outlet for Red Sea oil compensating the Houthi threats, Hormuz transits seem unharmed so far from the recent hostilities, and oil storage around the world is sufficiently full to absorb any short-term supply dent,” he further added. 

The world in not running out of oil just yet, and from an even greater perspective, there is no chronic undersupply, he pointed out.