Saudi oil pipeline to remain shut for weeks after drone attack, threatening global supply

A key Saudi oil pipeline could remain largely out of service for three to five weeks after a drone attack, raising fresh concerns over global crude supplies as disruptions also spread around the Bab el-Mandeb Strait.

The East-West Pipeline was shut after an attack last week. According to a report by The Associated Press, repairs, including work at a major pumping facility, could take three to five weeks. The pipeline may resume partial operations during the repairs, but the officials could not say how much oil would flow.

Saudi pipeline outage

The 1,200-kilometre East-West Pipeline connects Saudi oil-producing areas on the Gulf coast with the Red Sea port of Yanbu. It has become increasingly important as it allows Saudi Arabia to bypass the Strait of Hormuz, where shipping has been disrupted by the conflict.

The pipeline had been carrying between 2.6 million and 4 million barrels per day since late August, according to Rystad Energy. Reuters had earlier estimated flows at around 4 million bpd, equivalent to roughly 4 per cent of global oil supply.

Saudi Arabia had enough crude stored at Yanbu to maintain exports for only around five to seven days, according to the Reuters report. Additional stocks at Egypt’s Ain Sukhna and Sidi Kerir ports are also limited.

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Rystad said a month-long closure could cause a major disruption, with crude deliveries taking longer and becoming more expensive. A prolonged shutdown could force a significant reallocation of global oil flows.

Red Sea risks add to pressure

The pipeline outage comes as Houthi forces expand their presence around the Bab el-Mandeb Strait, a key shipping route linking the Red Sea and Gulf of Aden.

The Houthis have seized the strategic islands of Greater and Lesser Hanish, as well as the port city of Mokha and the island of Mayun, according to AP. The Bab el-Mandeb has carried around 4 to 5 per cent of global oil supplies in recent months.

The disruption comes after Saudi crude production had already fallen to about 6.2 million barrels per day in August from 10.9 million bpd in February, according to figures Riyadh provided to OPEC.

The International Energy Agency has estimated that global oil supply could decline by 5.7 million bpd this year if disruptions to Gulf flows persist.

With Hormuz flows also sharply reduced, a prolonged Saudi pipeline outage and further disruption around the Bab el-Mandeb could tighten global crude supplies, raise transport costs and add to inflationary pressure.