Saudi Pipeline Closure Sparks Fears of Energy Shortages

Saudi Arabia's East-West pipeline has been closed after a drone attack, sparking concerns about global energy markets already reeling from the war with Iran.

The pipeline, which stretches over 1,200 kilometers across the desert nation, was crucial in getting oil out of the Middle East via the Red Sea rather than through the Strait of Hormuz. With repairs expected to take three to five weeks, some experts warn that this could exacerbate existing supply shortages and push prices even higher.

The pipeline carried an average 2.6-4 million barrels per day, which is roughly 4% of global oil supplies. The recent jump in Brent crude prices to over $105 a barrel has already reflected the market's response to the 'significant loss of supply', according to Rystad Energy.

Meanwhile, the Strait of Hormuz remains a concern as only about 90 ships passed through it in the first week of September, compared to pre-war levels of around 130 per day. The Houthis have also tightened their grip on the Bab el-Mandeb Strait, further threatening Saudi exports.