Saudi Oil Pipeline Shutdown Sparks Global Market Fears

Saudi Arabia has shut down its East-West Pipeline due to drone attacks from inside Iraq, which have caused 'injuries and some damage.' The pipeline, which runs to the Red Sea port of Yanbu and feeds Saudi coastal refineries, is critical in re-routing millions of barrels of Saudi crude from the Persian Gulf during the war.

The shutdown could last for weeks, and if it does, up to 4% of the world's oil supply could be taken offline. The pipeline has been pumping around 6 million barrels a day of crude over the course of the war, shy of its full capacity of 7 million a day.

Traders are 'even more sensitive' to disruptions in the market because it's smaller and is also suffering from Ukrainian attacks on Russian refineries. A prolonged shutdown could push diesel prices in the US above $6.50 a gallon, according to Andy Lipow, president of Lipow Oil Associates.