Saudi Pipeline Attack Puts Marine War Risk Back in Spotlight

Saudi Arabia's East-West pipeline has been shut down after being struck multiple times, causing a number of injuries and damage to pump stations. The pipeline, also known as the Petroline, was built decades ago as a hedge against the closure of the Strait of Hormuz, which effectively occurred earlier this year when the US-Iran conflict halted oil flow through the strait.

The attack on the pipeline, believed to have been carried out by drones launched from Iraq, has put both of Saudi Arabia's main export arteries under strain at the same time. The Houthi forces have simultaneously tightened their grip on the Bab al-Mandeb strait, taking Perim Island and pushing toward the Yemeni town of Dhubab.

Brent crude was trading above $104 a barrel earlier today, with Capital Economics estimating that a serious, sustained hit to the pipeline could push Brent toward $120 a barrel. This would have significant implications for fuel costs, freight rates, and claims costs across commercial auto, marine cargo, and property lines.