Saudi Pipeline Closure Expected to Be Brief Amid Ongoing Tensions

The East-West crude oil pipeline in Saudi Arabia is expected to resume operations soon after it was shut down due to drone attacks from Iran-backed proxy groups. According to US Energy Secretary Chris Wright, the closure will be brief and temporary, lasting only days.

The pipeline was damaged in the strikes last week, forcing Riyadh to rely on the Strait of Hormuz for crude oil exports with US military support. The market is trying to assess the supply disruption caused by the pipeline outage, which has led to a 5% gain in US crude oil prices this week.

The closure could result in a loss of 120 million barrels if it lasts for a month, assuming 4.5 million barrels per day pass through the pipeline and 15 million barrels are stored at the Yanbu terminal on the Red Sea, said Matt Smith, director of commodity research at Kpler.