Tehran: Diplomatic initiatives in the Middle East stumbled on Monday following the abrupt postponement of high-stakes discussions between Iran and Gulf Arab monarchies, deepening fears over worldwide energy supplies as violence intensified along crucial transit corridors. Global oil prices surged more than 3% during early trading, crossing $100 per barrel amid cascading disruptions across both the Strait of Hormuz and alternative export channels. In the United States, retail diesel prices hit a fresh all-time peak above $6.20 per gallon, reflecting acute pressure on international fuel markets.
The regional meeting, scheduled to take place in Muscat to review a proposed shipping framework for the Strait of Hormuz, was deferred late Sunday. Omani Foreign Minister Sayyid Badr Albusaidi announced that the postponement was made in the interests of building broader consensus. Iranian officials confirmed that the decision was reached jointly with Muscat following requests from neighbouring regional states, though Iranian Foreign Minister Abbas Araqchi reiterated that Tehran will not restore normal navigation through Hormuz until broader geopolitical demands with the United States are resolved. Preliminary maritime data indicated that daily vessel transits through Hormuz dropped into single digits over the weekend, far below customary baselines, as recent strikes on commercial tankers forced shipping lines to divert or pause operations.
Supply bottlenecks tightened further following the shutdown of Saudi Arabia’s critical 1,200-kilometre East-West pipeline, which typically serves as the primary route to bypass the Persian Gulf chokepoint by funnelling crude to the Red Sea terminal of Yanbu. The conduit was halted after suffering damage during retaliatory strikes, with satellite imagery capturing heavy plumes of smoke along the infrastructure corridor. Energy traders noted that stored inventories at Yanbu can maintain current export volumes for roughly five to seven days; should the pipeline stay offline longer, up to 4% of total global oil supplies could be removed from the market.
Simultaneously, military volatility expanded around the Bab el-Mandeb strait following renewed offensives by Yemen’s Houthi movement, including strikes against regional infrastructure and cross-border targets in southern Saudi Arabia. With diplomatic mediation temporarily stalled in Oman and maritime passage through vital straits constrained, international energy markets face mounting supply strain and price instability heading into the autumn.
