Global oil prices fell sharply below $100 per barrel on Tuesday, driven by reports that Saudi Arabia is close to restarting a key pipeline damaged in recent attacks attributed to Iranian-backed Houthi forces. Brent crude, the international benchmark, declined more than 2 percent to approximately $98 a barrel, a significant drop from nearly $109 recorded just a week earlier.

The pipeline in question, Saudi Arabia’s East-West pipeline, has been shut since September 11, following strikes by Houthi militants. This 750-mile conduit, which transports crude oil across Saudi Arabia from the Persian Gulf to the Red Sea, had become vital for processing exports since attacks on oil shipments disrupted flows through the Strait of Hormuz. Saudi Arabia had increased oil loadings from Gulf ports to an average of 4.3 million barrels per day over the past week, compared to just 1.6 million barrels daily in early September, according to data from maritime analytics firm Kpler. This surge suggests either preparations for a prolonged closure of the pipeline or renewed confidence in shipping oil through the Strait of Hormuz despite ongoing regional tensions.

The East-West pipeline serves as a strategic route that allows Saudi crude to bypass the Strait of Hormuz, a critical and vulnerable maritime chokepoint. Its closure raised concerns about significant reductions in Saudi Arabia’s oil exports, potentially affecting global supply by as much as 120 million barrels over a month, according to Kpler estimates. The alternative route through the Red Sea and the Bab al-Mandab Strait has become less viable due to Houthi control and the persistent security risks in the area.

With the pipeline offline, Saudi Arabia and other Gulf producers have increasingly directed shipments through the Strait of Hormuz. The U.S. Navy has maintained a security presence in the area, enabling some oil tankers to transit near Oman’s coast, opposite Iran. Recent days have seen a relative decline in reported attacks on shipping vessels in the strait, which may have contributed to the easing of market fears.

The disruption in oil supplies and escalating crude prices have also fueled rises in refined fuel costs worldwide. In the United States, the national average price for gasoline reached $4.48 per gallon on Tuesday, marking a 50 percent increase since the outbreak of the conflict in Iran. Diesel prices have surged even more dramatically, averaging $6.53 per gallon—an increase of more than 70 percent over the same period. These increases have raised concerns about broader inflationary pressures and their impact on interest rates and bond markets.

U.S. President Donald Trump has pointed to Ukrainian attacks on Russian energy infrastructure as a major factor driving diesel prices, but analysts suggest that the conflict and instability in the Persian Gulf region have had a more significant influence on global fuel costs.

Before the recent hostilities, roughly 130 vessels transited the Strait of Hormuz daily. That number has since fallen to around 20 ships per day, though the actual volume remains uncertain because many tankers have been operating with their navigation tracking systems turned off to avoid detection.

Saudi Aramco, the state oil company, has not commented publicly on the status of the pipeline tests or potential restart plans. Meanwhile, the Abu Dhabi National Oil Company continues to export oil through the Strait of Hormuz despite the risks, maintaining regional energy flows amid heightened tensions.