Saudi Pipeline Shutdown Threatens Middle East Oil Supply and Asian Refiners

Asian refiners are facing uncertainty over oil loadings at the port of Yanbu in Saudi Arabia, following the temporary shutdown of the East-West pipeline due to drone attacks from Iraq. The shutdown is a precautionary measure after several injuries were reported.

The East-West pipeline has been a vital route for Saudi oil exports since the Middle East conflict began and the Strait of Hormuz was closed to shipping traffic. It allows Saudi Arabia to re-route most of its crude loadings from western ports in the Persian Gulf to Yanbu on the Red Sea.

With 4 million barrels per day (bpd) of Saudi crude oil shipments at risk, Asian refiners have asked Saudi Arabia for updates on oil loading schedules at Yanbu. At least four Asian refiners have not received any clarification yet, and two expect to pick up their cargoes as scheduled unless there is communication about delays in the coming hours and days.

Prices of Brent crude rallied to $108 per barrel in Asian trade after the market started pricing in a higher risk of disruption to Middle East oil supply. It's unclear how long the key Saudi pipeline will remain shut, but refiners are bracing for potential disruptions.