Saudi Pipeline Shutdown Threatens Energy Prices Amid Ongoing Conflict

Saudi Arabia has temporarily shut down its East-West pipeline after a drone attack on Saturday. The pipeline, which runs for over 1,200 kilometers across the Arabian Peninsula, is a vital route for global supplies of Middle East oil. It has been moving around 4 million to 5 million barrels per day, accounting for 4% to 5% of global supply.

The attack on the pipeline originated in Iraq, where Iranian-backed militias operate. The US President Donald Trump suggested that Iran was probably behind the strike. Saudi Arabia's de facto ruler, Crown Prince Mohammed bin Salman, phoned Trump and asked for US military help fighting the Houthis. However, Washington has not committed to direct intervention.

The shutdown of the pipeline is expected to send energy prices even higher. Oil prices have already surged over the past week, with the retail price of diesel in the United States reaching a record $6 per gallon. The Strait of Hormuz, another major oil route, remains largely shut due to the ongoing conflict.