Crude oil prices rose sharply on Sunday after Saudi Arabia shut down a major pipeline that transports crude while bypassing the Strait of Hormuz.

United States West Texas Intermediate futures gained 3.23 per cent to $103.28 per barrel by 3:41 a.m. ET, while Brent crude, the international benchmark, climbed 3.36 per cent to $108.13 per barrel.

The move followed drone attacks launched from Iraq on Thursday that damaged Saudi Arabia’s East-West pipeline, prompting the government to suspend operations along the key crude oil route.

Saudi authorities have yet to disclose the extent of the damage or indicate how long the pipeline will remain closed.

A diplomatic meeting between Iran and Gulf Arab states to discuss the situation around the Strait of Hormuz, which was scheduled for Monday in Oman, was abruptly postponed following the pipeline attack.

“In the interests of consensus the regional meeting set for tomorrow in Salalah has been postponed,” Oman’s Foreign Minister Badr Albusaidi said Sunday in a social media post. “We remain committed to fostering dialogue that supports stability and lasting cooperation in our region.”

The security situation around the Strait of Hormuz remains tense, with another tanker attacked on Sunday, triggering a severe fire onboard, according to the United Kingdom Maritime Trade Operations Centre.

The Saudi pipeline, which has the capacity to transport up to seven million barrels of crude oil per day, has become crucial in limiting the impact of oil supply disruptions caused by the Iran war. The pipeline stretches across Saudi Arabia, connecting oil-producing areas near the Persian Gulf with export terminals along the Red Sea.

Saudi Arabia has used the pipeline to reroute crude exports away from the Gulf as Iran and the United States continue their struggle for control of the Strait of Hormuz.