Saudi Oil Pipeline Halted After Drone Attack, Fuel Prices May Rise

A drone attack on September 9-10 has completely halted Saudi Arabia's "East-West" oil pipeline, a crucial export route bypassing the Strait of Hormuz. Satellite images released on September 14 show one of the pipeline's pumping stations was completely burned and severely damaged. Saudi Arabia's Foreign Ministry stated that several drones launched from Iraq targeted the infrastructure, with Riyadh blaming pro-Iranian groups operating there. These groups deny involvement and accuse Israel and the U.S. of seeking regional escalation.

U.S. President Donald Trump has pointed to Iran as being behind the attack. Saudi Arabia announced the pipeline's shutdown on September 11. While official details on the damage and repair timeline are pending, industry sources offer varying estimates. Some suggest repairs could take up to six weeks, while others believe partial pumping could resume sooner. The Guardian reported that if the pipeline doesn't restart soon, Saudi Arabia might deplete its exportable oil reserves, estimated to last only five to seven days at current export levels.

Additional oil can be supplied to customers via Egyptian ports for a few more days, but those storage facilities are also not full and will eventually empty if the pipeline remains offline. The "East-West" pipeline, spanning 1,200 km, connects Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu. It has been transporting approximately 4 million barrels of oil daily, about 4% of global supply, allowing Saudi Arabia to avoid disruptions in the Strait of Hormuz.

Concurrently, Houthi rebels have reportedly seized the Greater and Lesser Hanish islands in the Red Sea, approximately 160 km north of the Bab el-Mandeb Strait. This move strengthens their control over vital southern Red Sea trade routes. The pipeline shutdown, occurring amid rising tensions around the Strait of Hormuz and increased Houthi control of the Bab el-Mandeb, could further destabilize the global oil market and drive up already high fuel prices. This could also impact fuel costs in Israel, as its prices are calculated based on average Mediterranean fuel costs.

Egypt is attempting to mediate between Saudi Arabia and the Houthis, concerned about the impact of Red Sea tensions on Suez Canal traffic. Cairo has proposed hosting talks, but Saudi Arabia has not yet responded. Meanwhile, Oman canceled a planned meeting between Iran and Gulf states to discuss resuming tanker traffic through the Strait of Hormuz, with Iran's demands for transit fees and U.S. conditions remaining obstacles.