Saudi Attacks Send Oil Prices Soaring Amid Pipeline Disruption
Oil prices rose on Tuesday after attacks on Saudi Arabian energy infrastructure left the kingdom's East-West Pipeline offline, raising concerns about the impact on global oil supplies.
The pipeline outage is particularly concerning as it could exhaust crude available for export within days unless operations resume, according to buyers and traders. The East-West Pipeline allows oil exports to bypass the blockaded Strait of Hormuz, which previously carried a fifth of global oil supplies.
The attacks on Saudi Arabia's energy infrastructure are attributed to Iran-backed Houthi forces in Yemen, who targeted aircraft hangars, radar systems, runways and ammunition depots. The recent attack may be more severe and could threaten the remaining 2mb/d of recent Yanbu exports, with repair assessments ranging from 'very soon' to eight weeks.
The probability of Brent rising above $120 a barrel has increased, according to Goldman Sachs, citing a scenario in which average Gulf oil output in 2027 remains 4 million barrels per day below pre-war levels. Commodity vessel traffic through the Strait of Hormuz dropped to four on Monday, down from 10 a day earlier.