Saudi Arabia shuts East-West oil pipeline amid drone attacks, raising global supply concerns

Saudi Arabia announced on Friday that it had closed the East-West pipeline that runs to the Red Sea port of Yanbu, citing drone attacks inside Iraq that caused injuries and damage. No group has claimed responsibility, though the United States has suggested Iran-backed proxies operating in Iraq, a claim Iran’s foreign ministry denied.

The pipeline, which can transport up to 7 million barrels of crude per day and has been a key route for redirecting Saudi oil during the ongoing conflict between the United States and Iran, is estimated by Capital Economics to account for as much as 4% of global oil supply. Its shutdown could last weeks while the extent of damage is assessed.

The closure comes as Iran-aligned Houthi rebels in Yemen have seized the Red Sea ports of Mocha and the island of Perim, limiting alternative export routes. Brent and WTI crude prices rose more than 3% on Monday, reaching $108 and $103 per barrel respectively.

"It would be truly calamitous if the East-West pipeline cannot be repaired and brought on stream soon," said Bob McNally, president and co-founder of Rapidan Energy Group.

According to Richard Bronze of Energy Aspects, the pipeline has been pumping roughly 6 million barrels a day during the conflict, supporting both export flows and supply to Saudi refineries on the west coast. Disruptions to this smaller market are increasingly significant as diesel supplies are strained; U.S. diesel prices recently topped $6 per gallon.

Johannes Rauball of Kpler reported that Yanbu’s storage holds about 15 million barrels, which could be depleted in roughly four days at current withdrawal rates, while Janiv Shah of Rystad Energy estimates a five-to-seven-day depletion window. Energy analysts expect Saudi Arabia may resume partial flows while repairs are undertaken, but a prolonged outage could exacerbate price pressures.