Brent at $105.70 as Gulf states halt Hormuz talks, Saudi Arabia strikes Houthis

Brent crude traded near $105.70, up 1.02% a barrel early on Tuesday (Sept. 15) as Gulf Arab states postponed talks with Iran on reopening the Strait of Hormuz and Saudi Arabia launched retaliatory strikes against Yemen’s Houthi movement, adding to fears of a wider regional conflict and prolonged disruption to global oil supplies.

The planned meeting in Oman between Iran and Gulf Cooperation Council states had been expected to address a proposed temporary route for commercial shipping through the Strait of Hormuz, the vital oil chokepoint that carried about one-fifth of global oil exports before the war.

Instead, Oman’s foreign minister, Sayyid Badr Albusaidi, said the meeting was postponed “in the interests of consensus.”

The delay underscored deep divisions among Gulf states over terms for restoring navigation through the waterway, which has been largely closed since US and Israeli military operations against Iran began on February 28.

Brent had jumped as high as $108.41 a barrel during Monday trading before retreating. US West Texas Intermediate crude also rose above $102 as of Tuesday, 7.30am in Tokyo, as traders priced in the risk of deeper supply disruption. Murban crude, the Abu Dhabi benchmach, spike nearly 7% to $127.8, or up by $8.30 per barrel.

The price spike followed a succession of threats to the region’s oil-export network: attacks on shipping near Hormuz, disruption to Saudi Arabia’s East-West pipeline, and rising Houthi activity near Bab el-Mandeb, the Red Sea chokepoint linking the Gulf of Aden to the Suez Canal route.

The Saudi pipeline is particularly important because it provides a route for moving crude from the kingdom’s eastern oil fields to Red Sea terminals without passing through Hormuz.

Damage or a prolonged shutdown narrows Riyadh’s options at the same time that transit through the strait remains uncertain.

The diplomatic setback came as the Iran-aligned Houthis said they fired dozens of missiles and drones at Khamis Mushait air base in southern Saudi Arabia. The group said it targeted aircraft hangars, radar systems, runways and ammunition stores in retaliation for Saudi airstrikes in Yemen.

Saudi Arabia responded with strikes against Houthi targets in Yemen, as the conflict increasingly threatened both sides of the Arabian Peninsula.

The Houthis have also expanded their position along Yemen’s Red Sea coast, raising concern that Saudi crude exports redirected away from Hormuz could face a second risk point near Bab el-Mandeb.

The postponement of the Oman talks leaves no clear timetable for a regional agreement on shipping. Iran has said that an arrangement with Oman would not automatically reopen Hormuz, insisting that broader demands, including those related to the U.S. naval blockade, must first be met.

Washington and Tehran also remain divided over the purpose of future negotiations. US officials want renewed talks to concentrate on Iran’s nuclear programme, while Iran has tied any discussion to the status of Hormuz and the blockade.