Saudi Pipeline Closure Sparks Fuel Price Fears

The world's largest oil company, Saudi Aramco, has informed at least two European refiners that they won't receive any crude oil next month due to a critical pipeline remaining closed after a drone strike. The pipeline, which can move 7 million barrels of crude oil per day, was damaged in the attack. According to petroleum consultant Andrew Lipow, Saudi Arabia has few options left and may need to repair the pump stations before restarting the pipeline, which could take one to two months.

Without access to this pipeline and with the Strait of Hormuz and Bab el-Mandeb Strait too dangerous for most oil tankers, the situation is dire. The national average gas price in the US has hit $4.46, while diesel broke another record high of $6.44. California is experiencing the highest diesel prices in the nation, averaging $8.39.

Andrew Lipow explained that 'if Saudi Arabia is able to bypass the pipeline pump stations, then we may be able to see them restore operations at 50% capacity in the next few days.' However, if they need to repair the pump stations, it could take one to two months for the pipeline to restart.