Oil Prices Surge Over 2% After New Houthi Strikes on Saudi Arabia and Vessel Attack in Strait of Hormuz
Brent and WTI crude jumped more than 2% on Monday as Houthi attacks on Saudi infrastructure and a projectile strike in the Strait of Hormuz heightened global supply concerns.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Positive · Buy bias
Oil & Gas sector and related companies stand to gain from higher crude prices, so buy bias on affected tickers.
Sectors & Direction
Desk read
Desk call: Buy bias · Positively affected
- Oil & GasPositively affected
- PowerPositively affected
- FertilizerPositively affected
Companies
Mentions in This Briefing
Sectors: Oil & Gas, Power, Fertilizer — Positive · Buy bias. PSX tickers: OGDC, PPL. Oil & Gas sector and related companies stand to gain from higher crude prices, so buy bias on affected tickers.
Full Story
Open on Business Recorder## Market Reaction
On Monday, Brent crude futures rose $2.90 to $107.51 per barrel (up 2.77%) and WTI futures gained $2.27 to $102.32 per barrel (up 2.27%). The rally followed fresh Houthi strikes on Saudi Arabia’s southern Jazan province and a projectile hit on a vessel transiting the Strait of Hormuz, which forced the crew’s evacuation.
## Geopolitical Developments
Saudi state media released footage showing damage to homes and a mosque in Jazan, attributing the attack to the Yemen‑based Houthi group, which also claimed to have hit a Saudi military base nearby. In the Strait of Hormuz, the UK Maritime Trade Operations (UKMTO) confirmed a vessel was struck, causing a fire. Iran reported one fatality and four injuries on an Iranian commercial ship hit off its coast.
## Supply‑Side Concerns
The incidents compound earlier worries after a drone strike in Iraq shut Saudi Arabia’s East‑West oil pipeline on Friday, a route that previously allowed the kingdom to bypass the Hormuz chokepoint. Analysts estimate the pipeline outage could affect up to 4% of global oil supply. Additionally, Houthi forces have moved onto Perim Island, tightening control over the Bab el‑Mandeb Strait, another critical oil transit lane handling 4‑5% of world supply.
## Outlook
Oil has already risen 8% this week, breaking the $100 barrier for the first time since July. Market analysts warn that unless the pipeline is restored quickly or diplomatic talks in Oman produce a tangible de‑escalation, crude could continue its upward trajectory toward the early‑March high of $119.48.
## Implications for Pakistani Markets
Higher crude prices typically boost earnings for Pakistan’s listed oil‑and‑gas companies and can lift related sectors such as power generation and fertilizer, which rely on oil‑derived inputs. Conversely, rising oil costs may increase import bills and pressure the broader economy, but the immediate effect on listed oil‑related equities is expected to be positive.