Pipeline Outage Threatens Global Oil Supply as Saudi Exports Plummet

Saudi Arabia is facing a major crisis as its east-west oil pipeline remains shut down after drone attacks. The pipeline, which has been rerouting around 4 million barrels per day to the Red Sea port of Yanbu, is crucial for Saudi exports and has been the key factor in maintaining global supply.

The pipeline's outage threatens a loss of up to 4% of global oil supply, exacerbating an already severe global supply crunch. With stocks at Yanbu running out within five to seven days, Saudi Arabia will soon be unable to export crude oil via this route.

Saudi oil production has already dropped to its lowest level in over three decades due to reduced flows through the Strait of Hormuz and the Red Sea. The International Energy Agency (IEA) predicts a global oil supply decline of 5.7 million barrels per day, or about 6%, this year.