The pipeline is shut and the island is taken. Oil has not traded since.

Daily Take

Saudi Arabia's East-West pipeline, the one export route for its crude that does not pass through the Strait of Hormuz, is shut after Thursday's drone strikes, and Iraq's government has confirmed the drones were launched from its territory. At the far end of the Arabian Peninsula, Houthi forces took Perim, the island in the middle of the Bab el-Mandeb strait, on Friday, a day after taking the port of Mocha on the coast behind it. Three export routes are now under pressure at once: Hormuz constrained, the bypass shut, and the Red Sea's southern gate held on its Yemeni side by the force that has spent the war attacking ships in it. Brent futures have not traded since Friday's settlement, and that settlement ran the other way: the front fell 2.81 percent amid the first pipeline reports, a sign the market thought its war premium had run ahead of events. Saudi stocks did trade Sunday, and fell. The barrel itself gets its first full-market reaction when futures reopen Sunday evening. So far this is an escalation of territory and diplomacy. Monday decides whether it becomes a price.

THE WEEK AHEAD

The UN Security Council took up Iran on Thursday, the day after the nuclear agency's board referred it, and adopted its agenda by 11 votes to 2, with Russia and China against and Somalia and Pakistan abstaining. The vote was procedural. No resolution was adopted, and the two votes against are the two vetoes that make a binding one unlikely. What it adds is a diplomatic clock beside the military one: the mandate of the Council's panel of experts on Iran expires September 27. The calendar behind it is the most crowded of the quarter. European Union ambassadors failed again Friday to renew the bloc's Russia listings, which lapse Tuesday, and meet Monday to try once more. The Federal Reserve decides Wednesday. The Bank of Japan decides Thursday into Friday.