Saudi Pipeline Halted Amid Regional Tensions Drive Oil Prices Skyward
Saudi Arabia has halted operations on its major East-West crude pipeline following recent attacks. The move is seen as a precautionary measure to prevent further damage, but it's likely to deepen the global energy crisis.
The East-West pipeline, which carries around 7 million barrels of oil per day, was already under pressure due to ongoing conflicts in the region. The closure comes amid heightened geopolitical tensions, particularly between Iran and the US.
Oil prices have surged as a result of the attack, with Brent crude rising towards $108 a barrel. West Texas Intermediate is nearing $103, while European natural gas prices have spiked by up to 3.8%.
June Goh, senior oil market analyst at Sparta Commodities SA, said 'It all boils down to the duration' of the outage. He noted that short-term disruptions can be offset by tapping inventories, but an extended closure would force crude output cuts.