Saudi Pipeline Shutdown Drives Oil Prices Up Amid Supply Fears
International crude oil prices rose by about 3 percent on Monday amid concerns of supply disruption. The price increase is due to fears that Saudi Arabia will run out of oil reserves for export within a few days if its main pipeline connecting to the Red Sea is not restarted.
The East-West oil pipeline of Saudi Arabia was temporarily shut down on Friday after a drone attack, which was carried out from Iraq. According to industry sources, Saudi Arabia has only enough reserves at the Yanbu port in the Red Sea to sustain five to seven days of exports.
Retail diesel prices in the US reached a new high on Sunday, exceeding $6.20 a gallon. The global supply crisis is expected to deepen if there is a further decline in Saudi production, pushing fuel prices to record highs and increasing inflation worldwide.