Houthi Drone Attacks Threaten Saudi Oil Supply Chain

Saudi Arabia's oil supply chain is facing a severe disruption after Houthi drone attacks damaged a key pipeline. The east-west pipeline, which carries Saudi crude from the country's oil fields in the east to Yanbu on the Red Sea, has been shut down since Friday.

The damage threatens to remove up to 4% of global oil supply from the market if it remains offline for an extended period. According to three industry sources cited by Reuters, Saudi Arabia has enough crude at the Red Sea port of Yanbu to maintain exports for only five to seven days.

This means that if the pipeline takes weeks to repair, Saudi Arabia could struggle to maintain its overseas supplies. A prolonged shutdown could remove millions of barrels of Saudi crude from global markets, further tightening supplies and putting pressure on already elevated oil prices.