Saudi Pipeline Shutdown Threatens Global Oil Supply
Saudi Arabia's East-West pipeline has been shut down after multiple drone attacks, which is expected to disrupt global oil supplies. The pipeline serves as a vital route for Saudi crude exports, and its closure will likely impact around 4% of the world's oil supply. According to Reuters, the loss of this pipeline threatens to further squeeze energy exports, potentially driving prices higher. As a result, the price of Brent crude surged above $109 a barrel last week.
The disruptions in the region are attributed to the ongoing conflict between Saudi Arabia and Yemen's Iran-backed Houthis. The Houthi rebels have also seized Perim Island in the Bab al-Mandab Strait, which could further threaten shipping routes through the Red Sea. A consultant told The Washington Post that 'with two critical maritime arteries simultaneously being choked, the world is facing an increasing constriction' of global energy flows.