Oil prices rose in early European trading Monday after attacks shut a key Saudi oil pipeline and Houthi militants in Yemen tightened their grip on the Bab al-Mandeb Strait, adding pressure on Middle East crude-export routes already constrained by the U.S.-Iran conflict.

Front-month Brent crude oil futures rose 2.8% to $107.55 a barrel, while front-month West Texas Intermediate crude oil futures gained 2.4% to $102.49 a barrel. Both benchmarks ended last week sharply higher, with Brent gaining 8.7% and WTI rising 9.4%.

Saudi Arabia's East-West Pipeline remained shut after multiple drone attacks last week. The pipeline carries crude from the kingdom's oil-producing east to the Red Sea coast, providing an important alternative export route with shipping through the Strait of Hormuz remaining constrained.

The attack adds more pressure on a vital energy corridor in the region. Iran-backed Houthi militants last week seized Perim Island and the coastal town of Dhubab after capturing the strategic port city of Mokha, tightening their grip on the Bab al-Mandeb Strait and raising risks around Red Sea crude shipments.

S&P Global Commodity Insights said crude and condensate flows through Bab al-Mandeb fell to 1.5 million barrels a day in August from 3.14 million in July, while crude loadings from the Saudi Red Sea port of Yanbu dropped to 2.8 million barrels a day from 3.9 million in the same period. Jack Kennedy, S&P Global Market Intelligence's head of Middle East and North Africa Country Risk, said Houthi gains around Mokha were unlikely by themselves to halt Saudi or regional exports but would erode the resilience of Saudi Arabia's Red Sea export route.

Kamco Invest said constrained shipping routes and low refined-product inventories have left oil markets particularly vulnerable to further geopolitical shocks. The firm noted that buyers in China and Singapore are sourcing crude from as far away as Latin America and West Africa, while South Korean refined products are taking longer routes to Europe as traditional trade patterns are disrupted.

Rystad Energy said a prolonged outage at Yanbu would increasingly force a wholesale reallocation of global crude flows. A one-month disruption could keep roughly 78 million to 120 million barrels out of the export market but could initially be managed through inventory draws, cargo deferrals and spot purchases. At two months, however, replacement barrels from the U.S., Canada, Brazil and West Africa would have to travel much farther to Asian refiners, tightening tanker availability and creating scarcity even if sufficient crude remained available globally. A three-month outage could eventually force less flexible Asian refiners to cut runs as replacement grades become unavailable, unsuitable or uneconomic after freight.

The International Energy Agency said Friday that the continuing U.S.-Iran diplomatic impasse and renewed attacks in the Gulf and Bab al-Mandeb have pushed the prospect of a normalization in oil flows into next year. The agency now expects global oil supply to fall by 5.7 million barrels a day this year to average 100.7 million barrels a day, a 1.3 million-barrel-a-day downgrade from its previous forecast, with a full recovery in Middle East supplies pushed into 2027.

Demand risks are also building alongside the supply shock. The IEA expects global oil consumption to fall by 2.5 million barrels a day this year--a 940,000 barrels-a-day downgrade to last month's projection--before rebounding by 2.6 million barrels a day in 2027.

The Organization of Petroleum Exporting Countries is less pessimistic, forecasting global oil-demand growth of around 400,000 barrels a day this year, while expecting growth to accelerate to roughly 2.4 million barrels a day in 2027. The cartel had kept planned October production levels unchanged earlier this month, citing its commitment to market stability.