Saudi pipeline outage lifts oil prices further

Oil prices climbed on Tuesday as Saudi Arabia faced renewed Houthi attacks and the East-West pipeline remained shut, heightening concerns about potential further disruptions to Middle East crude supplies. Brent crude surged $1.24 to $106.93 per barrel, while US West Texas Intermediate increased $1.29 to $102.65 in Asian trading.

This followed a series of Houthi strikes against Saudi targets on September 10, which led to injuries and prompted Saudi authorities to shut the 1,200-kilometre pipeline as a precaution. The pipeline, connecting eastern producing areas to the Red Sea port of Yanbu, has gained importance due to constraints on shipping through the Strait of Hormuz.

Market estimates suggest that if the pipeline remains offline, approximately 4 million barrels a day, roughly 4% of global oil supply, could be at risk. Yemen's Iran-aligned Houthi forces continued their attacks on Saudi Arabia, further complicating the situation. The disruption has heightened concerns over the Bab el-Mandeb Strait, another critical shipping corridor linking the Red Sea with the Gulf of Aden.

The shutdown has also raised questions about the adequacy of Saudi Arabia's storage and export infrastructure along the Red Sea coast to cover normal overseas sales during prolonged pipeline outages.