West Texas Intermediate (WTI) crude oil experienced significant volatility, trading near $98.00, about 1.4% higher on the day, after spiking more than 4% shortly after 12:30 GMT before giving up nearly all gains by 19:00 GMT [1]. The initial surge was triggered by the shutdown of a major Saudi pipeline on Friday, which was confirmed by satellite imagery showing a burnt-out pumping station on Sunday [1]. The pipeline, with a capacity of 7 million barrels per day, was closed as a precaution after drone attacks on its pumping stations, and there is currently no announced restart date [1].
Saudi Arabia, the world’s largest oil exporter, faced disruptions across all three of its main export routes during the week. Only four tankers exited through the Strait of Hormuz over the weekend, compared to about 100 per day before the war began on February 28 [1]. The Houthis seized the port of Mokha and Perim Island, declaring the Bab el-Mandeb strait open to all ships except Saudi vessels [1]. As a result, Saudi Arabia reported August crude oil production of 6.238 million barrels per day, its lowest since 1990, and exports near 3.2 million barrels per day, the lowest since 2013 [1].
The price rally was quickly reversed following four posts on Truth Social by former President Donald Trump between 15:05 and 16:31 GMT, with each post triggering a leg of the sell-off [1]. Trump’s final post stated that oil prices would "drop like a rock once the war is over," and the market responded with a sharp decline within the next half hour [1]. Other posts referenced Ukraine and Russia agreeing to stop targeting each other’s energy infrastructure, Iran’s desire for a deal, and ongoing tensions in the Strait of Hormuz, all contributing to the rapid unwinding of oil prices [1].
The market implications were immediate, with American diesel prices averaging a record $6.23 per gallon on Monday, and Gulf Coast exports dropping to about a quarter of pre-war levels in August [1]. The uncertainty over Saudi export capacity and geopolitical tensions in key shipping lanes have heightened volatility in the oil market [1].
CONCLUSION
Crude oil markets saw sharp swings as a Saudi pipeline shutdown initially drove prices higher, but gains were erased following market-moving social media posts by Donald Trump. Ongoing geopolitical risks and export disruptions continue to fuel volatility, leaving the market sensitive to further developments.