Saudi Arabia's Pipeline Closure Raises Fears of Global Energy Shortages
A recent drone attack on Saudi Arabia's East-West pipeline has raised concerns about global energy markets facing even starker shortages due to the war with Iran, leading to higher prices for fuel and other essentials.
The largest oil producer in the Middle East closed its 1,200-kilometer (746-mile) pipeline after the attack, which it blamed on drones from Iranian-backed militias in Iraq. Repairs could take three to five weeks, according to regional officials.
The pipeline is crucial for getting some crude out of the Middle East by shipping it to the Red Sea rather than through the Strait of Hormuz. The strait has seen a significant decrease in tanker traffic since the war, with only 90 transits recorded in the first week of September compared to the usual 130 daily.
Rystad Energy noted that an average of 2.6 million to 4 million barrels of oil a day moved through the pipeline and out of the Red Sea port of Yanbu since late August, a volume at risk of 'disappearing from the market'. This is about 4% of the global oil supply, according to the International Energy Agency.