Saudi Pipeline Shutdown Threatens Global Oil Supply

A key east-west pipeline in Saudi Arabia has been shut down after drone attacks, sparking concerns about oil exports. The pipeline, which carries around 4 million barrels per day of oil to the Red Sea port of Yanbu, is a crucial alternative route for the world's largest oil exporter.

The shutdown could remove up to 4% of global supply, deepening an energy crunch that has already pushed fuel prices to record highs. Saudi Arabia currently has enough oil stocks to maintain exports for only five to seven days at Yanbu, with limited additional supplies available at other ports.

Estimates on the repair timeline vary, but one source suggests repairs could take up to six weeks. The shutdown is particularly concerning given that Saudi oil supply has already fallen to its lowest level in over three decades due to reduced flows through the Strait of Hormuz and the Red Sea.

The International Energy Agency (IEA) expects global oil supply to fall by 5.7 million barrels per day this year, or about 6%. A prolonged pipeline outage could further constrain Saudi Arabia's ability to move crude to international markets at a time when supplies are already under pressure.