Saudi Pipeline Shutdown Deepens Global Oil Supply Risk
The closure of Saudi Arabia's East-West pipeline due to drone attacks has severely impacted global oil supply. The pipeline carries approximately 4 million barrels per day to the Red Sea port of Yanbu, accounting for about 4% of global crude flows.
According to industry sources, inventories at Yanbu would only sustain exports for 5-7 days if the pipeline remains closed. This development adds another major constraint to Middle Eastern crude flows and increases the risk of supply disruptions in the region.
Hormuz Strait, a critical shipping route through which around one-fifth of global crude and LNG supply passes, also faces increased risks due to reduced traffic and security concerns. The planned meeting between Iran and Gulf states for establishing a secure shipping channel was postponed, further exacerbating the situation.