Houthi Attacks on Saudi Oil Infrastructure Fuel Global Energy Price Spike
Fresh attacks on Saudi oil infrastructure have put upward pressure on global energy prices and political pressure on the White House to intervene. The closure of the East-West Pipeline, also known as Petroline, will last for a matter of weeks, according to the Associated Press. This pipeline spans about 750 miles across Saudi Arabia and has become a critical route to avoid exporting oil through the Strait of Hormuz during the Iran war, carrying up to 7 million barrels of crude oil daily.
Last week, the pipeline was hit by drone strikes launched from Iraq that Saudi Arabia blamed on an Iran-backed militia. The Houthi rebels, backed by Iran, have been gaining ground near the Red Sea and its Bab el-Mandeb Strait. On Monday, Houthi military spokesperson Yahya Saree claimed the rebel group carried out a large-scale attack on Saudi Arabia's King Khalid Air Base.
Crown Prince Mohammed bin Salman met with the top U.S. military commander in the Middle East to discuss 'the latest developments in the region.' President Donald Trump downplayed the role that hostilities in the Middle East have played in the rise of U.S. energy prices, stating that oil prices will fall when the Iran war ends.
The national average gas price was $4.31 on Monday, according to AAA, while diesel hit a record high of $6.23. The International Energy Agency cut its projection for average global supply by 1.3 million barrels per day and delayed its expectation for a full recovery in Middle East supply until next year.