Oil prices surged above $109 a barrel on Monday after a drone attack forced the closure of Saudi Arabia's East-West Pipeline, a critical export route. The Saudi Arabian Energy Ministry shut the pipeline as a precaution, while reports indicated the Houthi militia seized a strategic Red Sea island and port city, further threatening shipping. Traffic through the Strait of Hormuz remains severely restricted, with only 14 ships passing Sunday compared to a pre-war average of 130 daily, according to Kpler. A vessel was struck in Omani waters, leaving one crew member missing. Brent crude neared $110, up 50% since the war began, while West Texas Intermediate reached nearly $104. Tanker rates hit record highs per Clarksons.

Global markets reacted negatively. The S&P 500 edged lower, with the Nasdaq 100 falling over 1% after AI executives urged slower development. Asian markets declined, led by South Korea's KOSPI dropping 3.3%. The 10-year Treasury yield topped 5% for the first time in three years, pushing the average 30-year mortgage rate to 6.76%. U.S. gasoline prices averaged $4.32 a gallon, 45% higher than pre-war levels.