Saudi Pipeline Shutdown Drives Up Oil Prices, Affects China's Fuel Costs

Drone attacks on Saudi Arabia's East-West pipeline have disrupted global oil supply, driving up prices and freight costs. The shutdown has sent Brent crude rising around 3% to $107.72 a barrel at midday on Monday. However, Chinese refiners appear relatively insulated in the near term, having stopped loading Saudi crude from the Red Sea since August.

According to Emma Li, lead China oil market analyst at Vortexa, the impact on China is largely indirect due to this shift. The closure of the pipeline has forced Saudi Arabia to rely on alternative routes, which have been disrupted by transit issues in the Strait of Hormuz.