Saudi Arabia Shuts Down East-West Pipeline Bypassing Hormuz, Adding Upward Pressure on Oil Prices

BlockBeats news, September 12: After a key oil pipeline was attacked, Saudi Arabia announced the temporary closure of the approximately 1,200-kilometer East-West oil pipeline. The pipeline connects Saudi Arabia's main oil fields in the east to the Red Sea coast port of Yanbu and is an important channel for Saudi Arabia to export crude oil bypassing the Strait of Hormuz. Saudi Arabia's Ministry of Energy called the closure a "precautionary measure" and has not yet announced a timeline for resumption.

Saudi Arabia's Ministry of Foreign Affairs said the pipeline was attacked by drones from the direction of Iraq, and that it will not retaliate for now. At the same time, Iran-backed Houthi forces have recently continued attacking Saudi energy facilities and are advancing toward the Bab el-Mandeb Strait, further increasing Red Sea shipping risks.

The oil market has quickly priced in supply risks. Brent crude closed on Friday at $104.56 per barrel, up more than 8% for the week. In August, Saudi Arabia's crude oil exports through the port of Yanbu were only about 2.5 million barrels per day, the lowest level since 2013; as alternative export routes are blocked, Saudi Arabia's crude oil supply capacity faces further contraction pressure.

With the Strait of Hormuz and the Bab el-Mandeb Strait, two major energy transportation routes, simultaneously at risk, the market is reassessing the possibility of disruptions to global crude oil supply.