Oil Prices Rise Following Saudi Arabia's East-West Pipeline Closure
Saudi Arabia shut down its key East-West Pipeline after multiple drone attacks on Sept. 10, causing oil prices to rise sharply as traders worried about the disruption of a major crude export route that bypasses the Strait of Hormuz. Brent crude climbed over $108 per barrel while U.S. West Texas Intermediate futures rose above $103 per barrel. The pipeline can transport up to 7 million barrels daily and has been crucial during tensions between the U.S. and Iran, allowing Saudi Arabia to export oil without using Hormuz. Iraq's Prime Minister Ali Al-Zaidi ordered an investigation into the drone strikes, which originated near a region bordering Iran. Current crude reserves at Yanbu are sufficient for about five to seven days of exports before severe market impacts occur. The closure adds pressure amid ongoing regional tensions and recent attacks on Saudi energy facilities and a tanker in Hormuz. The International Energy Agency recently cut its 2026 oil forecasts, warning of supply shortfalls due to stalled diplomacy and shipping lane disruptions.
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