Saudi East-West Pipeline Remains Shut Amid Drone Attacks
The global oil market is facing another setback as Saudi Arabia's East-West pipeline remains shut due to damage caused by drones launched from Iraq. The pipeline, which runs across the Arabian Peninsula, was a crucial relief valve for the world's biggest crude exporter, allowing it to bypass the blockage at the Strait of Hormuz and keep its oil shipments flowing.
The closure has added to the threats to Saudi Arabia's energy assets and Red Sea exports as Yemen's Houthi rebels step up their attacks. According to a person familiar with the matter, State-run Saudi Aramco is seeking to restore the pipeline to about half capacity within days and reach full capability in about six weeks.
The East-West pipeline plays a significant role in Saudi Arabia's oil industry, connecting its massive oil fields in the east of the country with the port of Yanbu on the Red Sea. Around two million barrels a day of crude carried by the pipeline are used domestically, mostly by refineries along the Red Sea.
The interruption to flows through the East-West pipeline has jolted a market that was already clamouring for supply, and oil prices have since pared some of their gains. However, they remain around $100 a barrel amid the possibility that some volumes may return in the near term.