Saudi Pipeline Closure Sparks Fears of Global Oil Shortages

Saudi Arabia has closed its East-West pipeline after an attack by Iranian-backed militias in Iraq, raising fears of global energy shortages and higher prices for fuel and other essentials. The pipeline is crucial to getting oil out of the Middle East, particularly since the war with Iran disrupted shipping through the Strait of Hormuz.

The 746-mile pipeline carries oil from a processing facility near the Persian Gulf westward to the Red Sea, where it's loaded onto tankers heading north to Europe or south to Asia. Rystad Energy said an average of 2.6 million to 4 million barrels of oil per day moved through the pipeline since late August, with four million barrels per day being about 4% of the global oil supply.

The closure of the East-West pipeline comes as the Strait of Hormuz is still a major concern for oil flows from the Middle East. While some tankers are again traversing the strait, traffic is well below what it once was, with only 90 transits in the first week of September compared to 130 daily before the war.

Salvatore Mercogliano, a professor of maritime history at Campbell University, noted that the East-West pipeline's closure would be 'cataclysmic' if it were the only method for Saudi Arabia to get its oil out. However, since the Hormuz route has opened back up, it's not the death knell for Saudi Arabia.