Saudi Pipeline Closure Threatens Global Energy Crisis
Saudi Arabia's closure of its East-West oil pipeline after an attack by Iranian-backed drones has raised fears of a global energy crisis, pushing prices higher for fuel and other essentials.
The pipeline, which stretches 746 miles across the desert nation, carries oil from a processing facility near the Persian Gulf to the Red Sea, where crude is loaded onto tankers headed north towards Europe via the Suez Canal or south through the Bab el-Mandeb Strait. At risk of disappearing from the market are an average 2.6 million to 4 million barrels of oil per day, which is about 4% of the global oil supply.
The closure has sparked concerns that the war with Iran could face even starker shortages, as the pipeline was crucial in keeping some oil flowing out of the Middle East while most tanker traffic in the Strait of Hormuz remained at a standstill. With Brent crude trading at over $105 a barrel, analysts warn that more supply shocks and higher prices straining households could pile up.