Saudi Arabia could run down oil stocks earmarked for export via the Red Sea if it does not restore operations in the coming days on the East–West pipeline, an alternative route for shipping oil that bypasses the Strait of Hormuz.
Buyers of Saudi crude and traders told Reuters.
On 11 September, following drone attacks, Saudi Arabia—the world’s largest oil exporter—was forced to halt operations on the pipeline. Riyadh has so far not provided detailed information on the extent of the damage or the timeframe for resuming flows.
According to the agency’s sources, repairs could take five to six weeks. Another source believes the pipeline could be fixed more quickly, with pumping partially restored even while repair work is still under way.
The pipeline was used to transport about 4 million barrels of oil a day to the port of Yanbu on the Red Sea coast. That is roughly 4% of global oil supplies.
A prolonged shutdown of the pipeline could remove these volumes from the global market.
Further supply cuts could deepen the global oil shortage, against which world prices have already risen and inflationary pressure has intensified due to the blockade of the Strait of Hormuz.
- On 11 September, Brent crude rose to around $107 a barrel amid escalating fighting between Yemen’s Houthi militants and forces backed by Saudi Arabia.