Saudi Pipeline Shutdown Threatens Global Oil Supply

Saudi Arabia's major pipeline to the Red Sea has been shut down since Friday due to drone attacks, threatening up to 4% of global oil supply. The pipeline, which reroutes around 4 million barrels per day, is crucial for Saudi exports and will run out of stocks within five to seven days if it doesn't restart.

Saudi Arabia has storage capacity at Yanbu on the Red Sea, but it's not full and will ultimately deplete without the east-west pipeline resuming operations. The country also has smaller amounts stored in Egypt, which may be used as a backup.

The global supply crunch is already pushing fuel prices to record highs, sparking inflation worldwide, and sending U.S. bond yields to their highest levels since the 2008 financial crisis. With Saudi oil production already at a three-decade low in August, the situation is precarious.