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Saudi Oil Pipeline Attack: Global Supply at Risk
13 Sep
Summary
- Saudi Arabia faces potential loss of 4% global oil supply.
- The kingdom has only 5-7 days of export storage left.
- Drone attacks forced a shutdown of the vital east-west pipeline.
Saudi Arabia's critical east-west oil pipeline, crucial for rerouting 4 million barrels per day, was shut down following drone attacks. Traders now warn that up to 4% of global oil supply is at risk if pumping does not resume within days.
The kingdom's export storage at Yanbu, on the Red Sea, has capacity for only five to seven days of shipments. Additional, but limited, stocks are available from Egyptian ports. Without the pipeline, these reserves will eventually be depleted, potentially leading to a significant reduction in global oil availability.
The damage to the pipeline, which bypasses the Strait of Hormuz, has occurred at a time of already strained global energy supplies. The International Energy Agency has reported a decline in world oil supply, further intensifying concerns about record-high fuel prices and global inflation.
