Saudi Arabia's East-West Pipeline Targeted by Houthi Forces
The oil market is grappling with yet another disruption as Iranian state media reported that Houthi forces targeted Saudi Arabia's East-West oil pipeline, causing fires at six locations along the route.
The claim remains unconfirmed, but even an attempted strike represents an important escalation because the East-West pipeline has become more valuable as tanker traffic through Hormuz has deteriorated.
The pipeline carries crude from Saudi Arabia's eastern producing region across the country to the Red Sea, allowing Saudi barrels to reach global markets without passing through the Strait of Hormuz.
Vitol chief executive Russell Hardy estimated that around 10 million barrels a day were crossing the waterway, approximately half the pre-war rate, while Goldman Sachs commodities strategist Yulia Zhestkova Grigsby estimates flows at between 15 million and 16 million barrels a day, closer to two-thirds of normal.