Saudi Pipeline Closure Threatens to Keep US Fuel Prices High

Fuel prices in the US are unlikely to drop soon due to the closure of a critical Saudi pipeline after a drone strike damaged it. The pipeline, which can move 7 million barrels of crude oil per day, has been closed since the attack and may remain shut for one to two months while repairs are made.

According to petroleum consultant Andrew Lipow, Saudi Arabia's options for bypassing the pipeline pump stations are limited, making it difficult to restore operations at 50% capacity in the next few days. If repair work is needed on the pump stations, the pipeline may not be fully operational until the end of the year.

The closure of the pipeline comes as fuel prices continue to soar, with the national average gas price hitting $4.46 and diesel reaching a record high of $6.44. California is experiencing the highest diesel prices in the nation, averaging $8.39, which impacts not just Californians but also those who rely on transportation for their livelihoods.

Lipow notes that the ports of Los Angeles and Long Beach receive 40% of container traffic into the country, and all goods delivered on ships are transferred to trucks and railroads that consume diesel. This means higher delivery charges, fuel surcharges, or the cost is simply wrapped into the price of the goods.