Oil boosts profits after Houthi attack on Saudi Arabia

Oil prices extended their gains on Tuesday following reports of a new Houthi attack on Saudi Arabia and Iranian attacks on ships in the Gulf.

International benchmark futures brent crude oil Prices for November delivery rose 1.93% to $107.72 a barrel as of 3:10 a.m. ET. us West Texas Intermediate Futures In October, it rose 1.88% to $103.30 per barrel.

Saudi Arabia has shut down a vital east-west pipeline that bypasses the Strait of Hormuz after drones fired from Iraq damaged it, further exacerbating oil supply disruptions in an already tight market.

Yemen’s Saudi-led coalition said 13 civilians were injured on Monday after Houthi forces launched a wave of ballistic missile and drone attacks on Saudi Arabia, Al Jazeera reported.

Meanwhile, Iran’s military announced it had destroyed a state-of-the-art US drone over the Strait of Hormuz, following a series of operations by Tehran against US unmanned naval systems in the Gulf. US President Donald Trump said on Sunday that the US would continue its campaign against Iran and could seize control of Iranian oil.

U.S. Central Command also disputed claims by Iran’s Islamic Revolutionary Guard Corps that the Panama-flagged oil tanker Elgaia struck a mine in the Strait of Hormuz.

Centcom announced that the Panamanian-flagged oil tanker “El Gaia” was hit by an Iranian missile last month and became unable to sail. “The Revolutionary Guards’ false claims are another example of their lies and intimidation in an effort to disrupt commercial shipping in the Straits.”

Komal Srikumar, president of Srikumar Global Strategies, said on CNBC’s “Squawk Box Asia” that inflation will accelerate given the attacks on oil pipelines and the closure of the Saudi East-West pipeline.

“In addition to that, the tariff war has accelerated considerably, which will put upward pressure on prices and hence bond yields,” Srikumar added.