Saudi Pipeline Outage Sends Oil Prices Soaring Amid Supply Concerns

Oil prices surged on Tuesday as concerns over Middle Eastern supplies remained in focus. The key East-West pipeline, which carries crude from Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu, is expected to be offline for weeks following last week's attacks by Yemen-based Houthis.

The 1,200-kilometer pipeline is crucial because it allows Saudi crude to bypass the Strait of Hormuz, where shipments have been heavily disrupted by the US-Iran war. It reportedly transported about four million to five million barrels per day, equivalent to roughly 4% to 5% of global supply.

U.S. Energy Secretary Chris Wright reportedly said that flows could resume 'within days.' However, other estimates suggest repairs could take five to six weeks, although partial operations may resume earlier.

Stephen Schork, principal of The Schork Group, warned that the US Strategic Petroleum Reserve could be drawn down to its operational limits by November. He previously estimated reserves could fall to about 245 million barrels by November, compared with the reserve's roughly 700-million-barrel capacity.