Saudi Arabia temporarily shut down its East-West oil pipeline on Friday after multiple drone attacks targeted key infrastructure, threatening to disrupt up to 4% of global oil supply. The closure comes as Yemen’s Iran-backed Houthi rebels seized control of Perim Island in the Bab al-Mandab Strait, further tightening choke points for energy shipments.
The 745-mile East-West pipeline, which carries roughly 4 million barrels of crude daily from Abqaiq to the Red Sea port of Yanbu, has been a critical alternative route for Saudi Arabia amid ongoing disruptions in the Strait of Hormuz. Industry sources cited by Reuters indicate that Yanbu’s export stocks could last only five to seven days if the pipeline remains offline. Satellite imagery shows significant damage to a pumping station near Medina, though the full extent of the disruption and repair timeline remains unclear.
Saudi Arabia has not provided details on damage severity or a restart timeline, and its energy ministry did not immediately respond to requests for comment. The pipeline’s closure exacerbates existing pressures on global oil markets, where Brent crude prices surged above $108 per barrel following the attack before easing to $107.22.
Immediate Impact: Supply Threat and Market Reaction
The pipeline’s shutdown removes a key bypass route for Saudi oil, which has relied on it to reroute exports away from the Strait of Hormuz—a critical chokepoint where tensions between the U.S. and Iran have repeatedly flared. The Houthis’ capture of Perim Island on the Red Sea’s Bab al-Mandab Strait further compounds risks to shipping lanes, raising concerns about potential blockades or increased attack threats.
Global oil prices reacted sharply to the developments. Brent crude hit $108 per barrel before retreating slightly, while West Texas Intermediate traded at $102.66. Commodity analysts at ING noted that the situation remains fluid, though they maintained a base-case forecast of $80 per barrel for Brent in Q4, citing continued flows through the Strait of Hormuz.
Geopolitical Fallout: Iraq Investigates, Houthis Expand Reach
Iraq has acknowledged that the drone attacks originated from its territory and fired a military commander while launching an investigation. The Saudi government has previously accused Iran-backed militias in Iraq of targeting its oil infrastructure, a claim denied by Tehran. Iraqi Prime Minister Ali al-Zaidi is currently on a European tour, meeting with leaders in France and Germany, though no public statements have addressed the pipeline attack’s consequences.
Meanwhile, the Houthis’ control of Perim Island—strategically located between Yemen and Djibouti—expands their influence over a second major maritime route. The Bab al-Mandab Strait, alongside the Strait of Hormuz, handles a significant portion of global oil and LNG shipments. Analysts warn that further Houthi advances could disrupt Red Sea shipping, adding pressure to already strained energy markets.
Long-Term Risks: Energy Security and Diplomatic Standoffs
The pipeline’s closure and Houthi territorial gains underscore the fragility of global energy supply chains, particularly as the U.S.-Iran conflict persists. U.S. President Donald Trump has suggested that American forces could remain in Iran to "keep the oil," drawing parallels to Venezuela, though no formal policy changes have been announced. Trump also criticized Ukrainian strikes on Russian oil facilities, blaming them for diesel shortages rather than Middle Eastern conflicts.
Diplomatic efforts to de-escalate tensions have stalled. A planned meeting between Iran and regional countries in Oman was postponed indefinitely, with Omani officials citing the need for consensus. The cancellation follows ongoing exchanges of strikes between the U.S. and Iran, with the Strait of Hormuz remaining a primary flashpoint.
Saudi Arabia’s Strategic Shift and Alternative Routes
The East-West pipeline has been a cornerstone of Saudi Arabia’s strategy to mitigate risks in the Strait of Hormuz, where tanker traffic has faced repeated threats. The pipeline’s 7-million-barrel-per-day capacity has allowed the kingdom to reroute exports to Yanbu, avoiding the vulnerable Gulf waterway. With the pipeline offline, Saudi Arabia may rely on limited stocks at Egyptian ports such as Ain Sukhna and Sidi Kerir, though these reserves are insufficient to replace the pipeline’s output long-term.
Industry sources suggest repairs could take five to six weeks, though partial resumption of operations is possible during the process. The timeline remains uncertain, adding to market volatility.
Expert Assessments: Market Resilience vs. Supply Risks
While some analysts remain cautiously optimistic about market stability—citing continued flows through the Strait of Hormuz—others warn of prolonged disruptions if the pipeline remains shut or if Houthi attacks intensify. The simultaneous choking of two critical maritime arteries has raised alarms about the resilience of global energy infrastructure.
A consultant quoted by The Washington Post described the situation as an "increasing constriction" of energy flows, highlighting the interconnected risks facing oil and gas supply chains.