Saudi pipeline that bypasses Hormuz shut after attacks

Saudi Arabia swiftly shut down its East-West oil pipeline, a crucial alternate route to the Strait of Hormuz, following a series of attacks on Thursday. The Ministry of Energy announced the precautionary closure on Friday, following an incident that caused several injuries. Emergency teams are now working to secure the pipeline and evaluate its safety.

Middle Eastern fighting has escalated in recent days, with Yemen's Houthi rebels claiming responsibility for targeting Saudi energy facilities in Abha, Najran, and Jazan. Meanwhile, the United States carried out strikes against Iranian oil tankers. Despite the alarming developments, oil prices remained relatively stable, with Brent futures settling at approximately US$105 per barrel.

However, the news of intensified hostilities had initially sent Brent prices soaring to near US$110 on Thursday, driven by concerns about the pipeline's potential impact on regional energy supplies. The East-West pipeline plays a vital role in Saudi Arabia's oil exports, which were significantly disrupted by the ongoing conflict in Iran.

Capable of transporting up to 7 million barrels of oil per day, the pipeline quickly reached full capacity as tanker traffic in the Strait of Hormuz came to a near halt. The pipeline routes oil from the Persian Gulf towards the Red Sea, where it can be loaded onto tankers for global distribution. However, the route has faced increasing pressure from Houthi attacks.

Saudi oil exports plummeted to around 3 million barrels per day in August, the lowest level since early 2017, as vessels have been targeted in the Red Sea by Houthi militants. As oil prices reach record highs, fuel prices are also experiencing a surge. In the United States, average petrol prices at the pump have surpassed US$4 per gallon, a record high for this time of year, while average retail diesel prices have reached an all-time high of US$6 per gallon.