Saudi Pipeline Shutdown Threatens Global Oil Supply Amid Record Fuel Prices

Saudi Arabia has shut down its East-West oil pipeline following drone attacks from Iraq that threaten to disrupt 4% of global oil supply.

The 1,200-kilometre pipeline transports around 5% of the world's oil and has been moving about 4 million barrels per day to the Red Sea port of Yanbu. However, Yanbu stocks can only maintain exports for five to seven days without the pipeline.

Saudi Arabia condemned the drone attack as 'the targeting of the East-West pipeline in the Riyadh and Medina regions by several drones coming from Iraq.' An energy ministry official said the pipeline was stopped 'as a precaution.'

The incident is linked to global fuel prices, which have reached record highs. The International Energy Agency reported that Saudi oil supply had fallen to a more than three-decade low in August, and world oil supply will decline by 5.7 million bpd this year.