Saudi Pipeline Shutdown Threatens Oil Supplies to Asia
A temporary shutdown of Saudi Arabia's East-West oil pipeline has created uncertainty for Asian refiners. The pipeline, which transports approximately 4 million barrels per day of crude from Eastern Saudi Arabia to Yanbu on the Red Sea coast, was halted after a drone attack damaged parts of the system.
The pipeline's closure raises concerns about global oil supplies, with some estimates suggesting that it could remove around 4% of daily exports from the market. Asian refiners have already adjusted to longer shipping routes and extended delivery times for Saudi crude, but the latest shutdown creates uncertainty over whether cargoes scheduled for Yanbu will load on time.
Industry sources estimate that Yanbu has enough inventories to maintain exports for only five to seven days if the pipeline remains offline. Saudi Arabia may also draw on supplies held at Egypt's Ain Sukhna and Sidi Kerir terminals, which could provide additional flexibility for a limited period.