Saudi Pipeline Outage Adds Pressure on Global Oil Markets
A key Saudi pipeline has been temporarily shut down following an attack that damaged three pumping stations, more than initially reported. The East-West pipeline typically transports between 4 million and 5 million barrels per day (bpd), representing about 4%–5% of global oil supply. Repairs are expected to take five to six weeks, though partial operations may resume sooner. The outage has intensified an already strained oil market due to ongoing Middle East disruptions. Brent crude prices have surged past $108 per barrel as traders grapple with the loss of a major alternative export route outside Hormuz. Saudi Arabia is now forced back on relying more heavily on the Strait of Hormuz, increasing logistical complexity and costs for crude exports. Physical oil markets are showing signs of scarcity pricing, with Dated Brent reaching above $130 per barrel despite official benchmarks suggesting lower prices. The situation highlights vulnerabilities in global supply chains as market participants adjust to reduced flexibility.
