Investors anticipated that a damaged Saudi Arabian pipeline may be close to reopening, allowing more oil from the region to reach world markets. The global price of oil dropped on Tuesday on reports that Saudi Arabia was close to restarting a critical pipeline damaged in attacks by Iranian-backed Houthi militia. Brent crude, the global benchmark, fell over 2 percent to about $98 a barrel, down sharply from nearly $109 a week ago.

West Texas Intermediate crude, the main measure of U.S. prices, fell to about $90 a barrel. Saudi Arabia's East-West pipeline has been shut down since Sept. 11, when the Saudis said it was struck by Houthi militia. The pipeline, a 750-mile network that transports crude across Saudi Arabia, from oil fields near the Persian Gulf coast to ports on the Red Sea, had become the kingdom's primary way of exporting oil since the war in Iran began.

An extended closure threatened to drastically reduce how much oil Saudi Arabia, the region's largest oil exporter, could get out of the region. Kpler, a maritime data firm, estimated that a monthlong shutdown could result in the loss of 120 million barrels of crude for global markets. The East-West pipeline allows Saudi oil to bypass the Strait of Hormuz entirely.

Oil instead could be transported via the Red Sea, through the Bab al-Mandab Strait or via the Suez Canal and a pipeline across Egypt, headed primarily to customers in Asia. The U.S. national average price of gasoline hit $4.48 a gallon on Tuesday, up 50 percent since the start of the war. The average cost of diesel in the United States rose to $6.53 per gallon on Tuesday, up more than 70 percent since the war began.

Soaring prices for fuel used in trucks, trains and other heavy machinery have prompted worries of a broad acceleration in inflation, driving up interest rates and upsetting bond markets.