Saudi Arabia shuts key oil pipeline following multiple attacks

Saudi Arabia’s Ministry of Energy has confirmed the shutdown of its 1,200 km East-West Pipeline, after Yemen’s Iran-aligned Houthi militants targeted it last week.

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The strategically important oil pipeline was subject to multiple attacks in the Riyadh and Madinah region, resulting in several injuries, the energy ministry said in a statement.

“The pipeline was shut down as a precautionary measure,” the energy ministry said.

Brent crude’s price has moved higher following this development as it raises disruption concerns in a market that is already plagued by severe supply shortages, market analysts said.

“Oil prices are trading stronger this morning as Saudi Arabia’s East-West pipeline shutdown, coming on the heels of last week’s attacks, exacerbates supply concerns,” two analysts from ING Bank noted.

Riyadh is highly dependent on the pipeline, funnelling about 70% of its crude exports through the Red Sea terminal at Yanbu, to circumvent the Strait of Hormuz.

“The Saudis have shut down the 7m b/d [7 million b/d] pipeline. It’s unclear how severe any potential damage is, or how long it will be out of action,” ING Bank’s analysts added.

Since the Iran conflict effectively closed the Strait of Hormuz, a crucial trade artery through which one-fifth of global oil previously moved, OPEC+ producer Saudi Arabia has shifted its exports channels, relying on the Red Sea route.

The situation worsened in recent months, after the Houthi militants announced a naval blockade on Saudi Arabia, dragging the US-Iran conflict directly to the Red Sea gateway.

Notably, the Houthis gained control of the Yemeni port city of Mocha last week, advancing down the Red Sea coast, Reuters reported citing sources.

“Houthi units are also reported to have seized Zuqar Island; loss of Dhubab or Perim would put the Bab al-Mandeb fully within Houthi reach,” market intelligence provider Windward reported.

A Houthi takeover of the crucial shipping corridor flanking the Arabian Peninsula will hand Tehran a decisive wartime edge over Washington, threatening simultaneous disruptions across two major chokepoints and sending crude prices sharply higher.

By Aparupa Mazumder

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