Saudi Pipeline Closure Sparks Fuel Price Spike Fears
A drone strike has damaged a critical Saudi pipeline that can move 7 million barrels of crude oil per day, leaving Saudi Arabia with few options to restore operations. According to petroleum consultant Andrew Lipow, if the pump stations need repair, it could take one to two months for the pipeline to restart.
The damage assessment is still underway, but without access to this pipeline and the Strait of Hormuz and Bab el-Mandeb Strait being too dangerous for most oil tankers, Saudi Arabia's ability to supply crude oil to European refiners is severely impacted.
Fuel prices in the US are already at a high, with the national average gas price hitting $4.46 on Friday and diesel breaking another record high of $6.44, according to AAA. California is experiencing the highest diesel prices in the nation, averaging $8.39, which affects not just Californians but also those relying on trucks and railroads that consume diesel.
As a result, higher delivery charges, fuel surcharges, or the cost being wrapped into the price of goods are likely to follow, further burdening American households. According to a recent Fox News poll, 61% of registered voters consider gas prices a major problem, a 13-point jump from two years ago.