Saudi Pipeline Shutdown Sends Oil Prices Soaring Amid Growing Disruption Risks
Oil prices surged on Monday after drone attacks forced Saudi Arabia to shut its East-West crude pipeline, reducing a key bypass route as shipping through the Strait of Hormuz remains heavily constrained. Brent crude rose about 2.9% to $107.66 a barrel, while West Texas Intermediate gained roughly 2.4% to $102.48.
The East-West pipeline runs approximately 1,200 kilometres from eastern Saudi Arabia to the Red Sea port of Yanbu and has become more important since the US-Iran conflict restricted shipping through Hormuz. Saudi Arabia says the system can pump about 7 million barrels a day at full capacity, but actual flows were closer to 4 million barrels a day before the latest shutdown.
The pipeline's closure may sustain exports for only five to seven days if repairs take longer than expected. Goldman Sachs has outlined a scenario in which Brent could rise above $120 if attacks on Middle East shipping intensify and Gulf output remains significantly below pre-war levels, with Daan Struyven saying that widening shipping disruptions have become a materially greater risk.
HSBC analysts led by Kim Fustier have also raised their 2026 Brent forecast to $90 from $80, seeing a scenario in which persistent disruption could lift crude towards $120. However, oil prices may still retreat quickly if the Saudi pipeline restarts within days or diplomacy produces a workable shipping deal.