Meeting on Strait of Hormuz proposal postponed in the wake of fresh strikes and closure of Saudi Arabia’s oil pipeline

Middle East diplomacy has faltered with the postponement of a meeting between Iran and other Persian Gulf powers, while fresh attacks around the region’s two most important oil transit routes deepened concern over global energy supplies.

Oil prices jumped as markets reopened on Monday, following developments that threaten supplies from the world’s biggest exporter, Saudi Arabia, which kept a key 1200km east-west pipeline closed throughout the weekend after it was damaged in drone strikes on Friday.

Hopes for a diplomatic breakthrough in the near term faded when Oman’s foreign minister, Sayyid Badr Albusaidi, posted late on Sunday that a regional meeting scheduled for Monday had been postponed “in the interests of consensus”.

Iranian officials had said they would attend that gathering with Gulf Arab states to present an agreement with Oman on governing shipping routes through the Strait of Hormuz.

Iran’s Fars news agency cited an Iranian foreign ministry official as saying that the Oman meeting was postponed at the request of some regional countries in a decision jointly made by Tehran and Muscat.

The official said Iran would co-ordinate with Oman to determine a suitable date.

The postponement came on the heels of Saudi Arabia’s decision to shut down, at least for now, its pipeline that has served as the main route for Middle East oil bypassing the Strait of Hormuz.

Meanwhile, the strait continued to pose risks for oil shipping, with the British maritime security agency UKMTO saying on Sunday that a vessel had been struck by a projectile as it moved through the Strait of Hormuz, causing a fire and forcing the crew to be evacuated.

Iran, for its part, said one person was killed and four crew wounded aboard an Iranian commercial vessel struck off its coast.

Oil prices surged above $US100 ($A140) last week for the first time since July.

The politically sensitive retail price of diesel fuel in the United States rose on Sunday to another all-time high above $US6.20 ($A8.66) a gallon.

Traders and Saudi oil buyers told Reuters on Sunday that Riyadh had enough oil stored at its Red Sea port of Yanbu to maintain exports for just five to seven days if the pipeline struck on Friday remained shut.

After that, as much as four per cent of global oil supply could be jeopardised, on top of the millions of barrels a day already lost to the disruption to traffic through the Strait of Hormuz.

Saudi Arabia has not given full details of the extent of damage to its pipeline or said how long it will remain offline.

Sources who spoke to Reuters have given conflicting estimates for the time needed to fix it, ranging from days to weeks. Satellite images have shown huge columns of smoke from locations along the pipeline.

The recent uptick in violence tied to the war that the US and Israel launched six months ago follows a quiet August in which flows of Middle East oil had trickled back up.

In an interview with London-based pan-Arab news outlet Al-Arabi Al-Jadeed, Iran’s Foreign Minister Abbas Araqchi said despite any agreement with Oman, Iran would not reopen the strait until the United States satisfies Tehran’s demands.

The US has so far failed to achieve the objectives President Donald Trump set out when he launched “Operation Epic Fury” in February: to end Iran’s nuclear program, prevent it from being able to attack its neighbours and create conditions for its people to topple their rulers.

On a weekend trip to Ireland, Trump reiterated that he still expected the Iran war to end this year, possibly just after US midterm elections in November, and then the price of gasoline would “drop like a rock”.