Saudi Pipeline Outage Threatens Global Oil Supply
Saudi Arabia could face a major disruption to its oil exports if a crucial East-West pipeline is not restored soon after being damaged by drone attacks.
The pipeline, which carries around 4 million barrels of crude per day to the Red Sea port of Yanbu, has been a vital alternative to the heavily disrupted Strait of Hormuz. Its shutdown could remove up to 4 percent of global oil supply.
Industry sources say Saudi Arabia has only around five to seven days of export-ready oil stored at Yanbu, with additional stocks available at ports in Egypt. Repair estimates vary from several days to as long as five or six weeks.
The outage comes as global energy markets are already under severe pressure because of disruptions to shipping through the Strait of Hormuz and the Red Sea. A prolonged shutdown could push oil and fuel prices higher and intensify inflation worldwide.
Saudi Arabia’s oil production has also fallen sharply, adding to concerns about how much spare supply can be brought back to the market if the pipeline remains offline.
