Saudi shuts major oil pipeline

Picture Credit: by Newser

Saudi Arabia’s ability to keep its oil flowing to global markets is facing a major new threat as the escalating conflict in the Middle East puts one of the kingdom’s most important alternative export routes out of action.

Saudi Arabia temporarily shut its East-West oil pipeline after attacks targeted the infrastructure, with Riyadh reporting injuries and damage. The pipeline stretches roughly 1,200 kilometres from the kingdom’s oil-producing regions to the Red Sea port of Yanbu, allowing Saudi crude to bypass the Strait of Hormuz.

That alternative route has become increasingly important since the Strait of Hormuz was severely disrupted by the war. The East-West pipeline has been moving around 4 million barrels of crude per day, equivalent to approximately 4% of global oil supply. Its closure therefore removes one of the world's most important safety valves at a time when other routes are also under pressure.

The situation is being compounded by developments around the Red Sea. Iran-aligned Houthi forces have increased their control around the Bab el-Mandeb Strait, raising concerns over Saudi Arabia’s ability to move oil from Yanbu to international markets.

Oil traders responded rapidly. Brent crude climbed above $108 a barrel, while West Texas Intermediate moved above $103, reflecting growing fears that prolonged disruptions could tighten global supplies further.

Picture Credit: by Reuters

The timing is particularly concerning because Saudi oil production was already under pressure. The International Energy Agency reported that Saudi crude supply fell to around 6 million barrels per day in August, its lowest level in more than three decades.

For the global economy, the pipeline shutdown represents more than a regional infrastructure problem. If the disruption continues, refiners could face tighter supplies of crude and petroleum products, potentially pushing fuel and transportation costs higher worldwide.

Saudi Arabia still has significant reserves, production capacity and alternative infrastructure. But with both the Strait of Hormuz and Red Sea routes facing serious security risks, the latest attack demonstrates how quickly the world's oil-supply contingency plans can come under pressure.