Oil Prices Leap Above $108 as Gulf Supply Shocks Intensify

Key Moments

Brent crude for October and November rose more than 3% to above $108 a barrel, while October WTI climbed 2.3% to about $102.
Saudi Arabia temporarily closed its East-West pipeline after drone attacks, removing the key alternative route to the Strait of Hormuz.
U.S. national average diesel prices moved above $6 a gallon for the first time, roughly 60% higher than a year earlier.

Futures Rally as Brent Breaks Above $108

The oil market spent Monday morning digesting a series of negative developments out of the Gulf region, pushing benchmark prices sharply higher.

Brent crude futures for October and November delivery gained more than 3% and moved past $108 a barrel. The U.S. benchmark, West Texas Intermediate (WTI) for October delivery, advanced 2.3% to around $102. Both contracts extended the previous week’s gains after each had already moved back above the $100 mark.

Saudi Pipeline Shutdown Tightens Export Options

The latest price surge followed confirmation from Saudi Arabia that its East-West pipeline has been taken offline temporarily due to drone attacks.

This line transports crude across Saudi territory to ports on the Red Sea, enabling exports to reach global markets without traversing the Strait of Hormuz. With that route now unavailable, the system’s primary alternative to Hormuz is out of service precisely when the strait itself is at heightened risk.

Rising Peril in the Strait of Hormuz

The vulnerability of the Strait of Hormuz was underscored on Sunday, when a merchant ship was struck in the waterway. According to Iranian authorities, the incident left one person dead and three injured.

Passage through the strait has fundamentally changed compared with pre-war conditions. Vessels must now secure explicit authorization from Iran before transiting, and Tehran is considering a framework to levy service charges on traffic. Ships that do not follow these procedures are frequently attacked, while U.S. forces periodically conduct airstrikes along the Iranian coastline to challenge Tehran’s assertion of control over the passage.

Diplomacy on the Waterway Stalls

Efforts to defuse tensions through negotiations have also faltered. Oman has delayed planned discussions involving Iran and Gulf states over the long-term governance of the Strait of Hormuz, a route that carries a substantial share of global seaborne crude shipments.

Record Fuel Costs Hit U.S. Consumers

The fallout from disruptions around Hormuz and related infrastructure is clearly evident in U.S. fuel markets.

The national average diesel price in the United States climbed above $6 a gallon on Friday for the first time on record, rising from about $5.85 a week earlier and standing roughly 60% higher than the $3.71 paid by drivers a year ago. Gasoline prices are also elevated, averaging $4.22 per gallon after reaching record levels over the Labor Day weekend.

Fuel type / Flow	Current level	Previous level / Comparison
Brent (Oct/Nov)	Above $108 per barrel	Extended gains after moving back above $100
WTI (Oct)	Around $102 per barrel	Extended gains after moving back above $100
U.S. diesel (national average)	Above $6 per gallon	About $5.85 a week earlier; $3.71 a year ago
U.S. gasoline (national average)	$4.22 per gallon	Hit record levels over Labor Day weekend
Crude flows through Strait of Hormuz	About 7 million barrels per day	Around 20 million barrels per day before the war

Trump Blames Ukraine for Diesel Shortfall

U.S. President Donald Trump has directed criticism elsewhere for the surge in diesel prices.

Speaking to reporters in Ireland on Sunday, where he was attending the Irish Open at his Doonbeg golf resort, Trump stated Ukrainian President Volodymyr Zelenskyy “has to stop knocking out diesel fuel in Russia.”

“Let him go after targets, but not diesel fuel, because he’s causing a shortage of diesel fuel,” Trump added.

Ukraine has struck more than 20 Russian refinery targets this summer, which was followed by Moscow imposing a ban on diesel exports. During his return flight from a state visit to Ireland over the weekend, Trump repeated the assertion that these actions were driving shortages.

Supply Analysis Points to Hormuz Disruptions

Supply figures, however, paint a different balance of forces behind the market tightness.

Analysts estimate that Russia’s diesel export ban has removed roughly 800,000 barrels per day of diesel from global supply. In comparison, disruptions linked to the Strait of Hormuz account for around 1.2 million barrels per day of lost diesel, according to Lipow Oil Associates.

The broader impact on crude flows is even more skewed. Volumes passing through the Strait of Hormuz have declined from about 20 million barrels per day before the war to approximately 7 million barrels per day. In parallel, the two wars mentioned have led to the shutdown of refineries with a combined capacity of around 5 million barrels per day.