Saudi Pipeline Shutdown Threatens Global Oil Supply

The East-West cross-country pipeline in Saudi Arabia has been shut down after drone strikes from Iraq, raising concerns about global oil supply. The disruption could eliminate up to 4% of the world's oil supply, according to estimates.

Riyadh has yet to disclose the full scope of the damage or provide a timeline for restoring the pipeline, but sources suggest it may take five to six weeks to fully repair.

Saudi Arabia had been rerouting 4 million barrels per day through the pipeline to the Red Sea port of Yanbu, which can sustain exports for only five to seven more days. The kingdom also maintains several days' worth of supply through Egyptian ports, but these facilities are not at full capacity.

The shutdown comes as global oil supply is already under strain due to reduced flows through the Strait of Hormuz and other regions. Saudi oil output had dropped to its lowest level in over three decades in August, driven by reduced flows through both Hormuz and the Red Sea.