CNA Explains: Saudi Arabia's East-West pipeline is down. With its oil 'insurance policy' offline, what comes next?
Built in the 1980s to bypass the Strait of Hormuz, the East-West pipeline has become a crucial route for Saudi oil exports. With the pipeline now out of action following drone attacks, a prolonged outage could hit buyers, including those in Asia, hard.
The East-West pipeline, a crucial oil export route for Saudi Arabia built in the 1980s, is currently offline following drone attacks. This outage poses significant challenges for global oil markets, particularly for buyers in Asia, as the pipeline has become an alternative to bypass the Strait of Hormuz. The pipeline, capable of transporting 7 million barrels per day, has been increased to about 4 million barrels per day since the conflict disrupted shipping through the strait.
Saudi Arabia has been drawing on stored crude at Yanbu to keep exports moving, but the longer the shutdown, the harder it becomes to maintain those flows without finding alternative routes or cutting exports. The Red Sea route, another potential alternative, is also facing threats from Yemen's Houthis, making it a less reliable option as well.
Without the East-West pipeline, Saudi Arabia's ability to export oil is severely constrained, leaving limited options for the kingdom to maintain its oil supply.
Written by urgent.news from CNA - Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 1 other outlet
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