US-Iran War: Saudi Pipeline Outage Threatens Loss of 4% of Global Oil Supply
Strike on Iranian cargo ship in Strait of Hormuz kills 1 Emmanuel Addeh in Abuja Saudi Arabia will run out of oil stocks for exports if it doesn’t restart its major
Saudi Arabia faces the prospect of a significant reduction in its oil exports if it cannot restore its major pipeline to the Red Sea within days, leading to a potential loss of up to 4% of global oil supply, according to Saudi oil buyers and traders. The pipeline, which has supplied around 4 million barrels per day, or 4% of global oil, has been out of service since drone attacks forced its shutdown on Friday.
Riyadh has not disclosed the extent of the damage or the duration of the outage. Sources estimate repair could take five to six weeks, but operations may resume partially sooner. Without the pipeline, Yanbu, a key storage facility, will only have stocks to maintain exports for five to seven days. The International Energy Agency (IEA) reported that Saudi Arabia's oil supply has fallen to a three-decade low in August, with global oil supply set to decline by 5.7 million barrels per day (6%) this year.
The attack on the pipeline, combined with Houthi fighters seizing an island in the Red Sea, has intensified shipping threats in the region. Iran's state-run news agency blamed the attack on a "terrorist enemy," while the U.S. military faces new challenges from Iranian ballistic missiles. Iran and Oman are set to meet in Oman to discuss managing shipping through the Strait of Hormuz.
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