Saudi Pipeline Shutdown Cuts Global Oil Supply by Up to 5%

Saudi Arabia's East-West oil pipeline has been temporarily shut down following a drone attack. The pipeline, which stretches for 1,200 kilometers across Saudi Arabia to the Red Sea, had been carrying between 4 million and 5 million barrels per day (bbl/d) in recent months.

This is equivalent to around 4%-5% of global oil supply, making it a significant disruption to Saudi exports. The pipeline has played a crucial role in maintaining Saudi crude flows during the US-Iran war, which has reduced tanker traffic through the Strait of Hormuz.

The Saudi Energy Ministry reported that the drone attack originated from Iraq, where Iranian-backed militias operate. Injuries and damage were reported, but the extent is still being assessed. The shutdown adds pressure on Saudi exports as shipping risks also increase around the Red Sea and Bab el-Mandeb.