Repairs could be completed soon or take up to eight weeks, say experts: File Image/Pixabay 

Oil on Tuesday extended its gains, this time settling $3 higher as the implications of crude loadings at the Red Sea hub of Yanbu being suspended continued to spook investors.

The Saudi Arabia pipeline to the hub, which had been attacked by Iran-backed Houthis, transported 7 million barrels per day (bpd) of crude, and traders warned that prolonged continuation of the suspension could cut off up to 4 percent of global oil supply, in addition to the disruptions at the Strait of Hormuz.

Brent settled up $3.07, or 2.9 percent, at $108.75 per barrel, while West Texas Intermediate settled up $4.44, or 4.3 percent, at $105.83 per barrel, after sources said Riyadh had informed European customers that some late-September crude cargoes would be cancelled.

However, this increased expectations that European refiners will turn to U.S. supplies, which should calm WTI prices in the foreseeable future.

Goldman Sachs estimated that repairs to the pipeline could take up to eight weeks but added that they could also be completed “very soon.”

Also affecting crude trading on Tuesday was the National Oil Corporation (NOC) of Libya, which reported that operations at three oil fields were suspended after protesting members of the Petroleum Facilities Guard shut a valve on the Hamada-Zawiya crude export pipeline; a force majeure could be declared as a result.

However, supply tightness didn’t seem to be an issue in the U.S., at least: the American Petroleum Institute on Tuesday estimated that crude inventories rose by a huge 7.1 million barrels in the week ending September 11, compared to a fall of 300,000 barrels the week prior.

U.S. production for the same time period rose to 13.9 million bpd, and the Institute added that inventories in that country are up nearly 10 million for the year.