Saudi pipeline shutdown threatens to wipe out 4% of global oil exports within days: Report

A drone strike on Saudi Arabia's East-West pipeline has forced the shutdown of the kingdom's primary bypass route, leaving the world's top oil exporter just five to seven days away from running out of export stocks and potentially severing 4% of global oil supply, according to a Reuters report.

The emergency halt to the 1,200-kilometer trunk line — which delivers roughly 4 million barrels per day across the Arabian Peninsula to the Red Sea port of Yanbu — comes as a major blow to energy markets already strained by broader Middle East conflict.

For six months, the bypass allowed Saudi Arabia to sidestep the wartime shutdown of the Strait of Hormuz, where tanker flows have plummeted from pre-war levels of 22 million barrels per day down to just 6 million to 9 million.

Riyadh has maintained silence regarding the full extent of the damage, leaving energy markets on edge amid conflicting reports. Industry sources familiar with the matter gave varying repair estimates, with one indicating fix-it work could drag on for five to six weeks, while another suggested partial pumping could resume sooner as repairs continue.

The sudden outage leaves Yanbu with only five to seven days of remaining export stock from its estimated 35 million-barrel capacity, while supplementary Saudi holdings at Egypt’s Ain Sukhna and Sidi Kerir ports offer only a few additional days of buffer.

Saudi oil output hits lowest mark since 1990

Saudi Arabia's crude oil output plummeted to 6.24 million barrels per day in August, reaching its lowest reported mark since 1990 as the escalating US-Iran conflict systematically chokes off major energy arteries across the region.

Direct figures submitted by the kingdom to OPEC on September 11 reveal a sharp month-on-month collapse of roughly 1.9 million barrels per day, down from 8.1 million barrels per day in July. The abrupt drop wipes out a short-lived recovery from June — when output stood at 7.1 million barrels per day — and completely undermines planned supply increases set by Saudi Arabia and its OPEC+ allies for the month.

The contraction underscores how the fallout from the US-Iran war is rapidly bleeding beyond the immediate combat zone. With traditional shipping lanes through the Persian Gulf and the Strait of Hormuz increasingly dangerous, Saudi Arabia had pivoted heavily toward its western infrastructure, relying on the Red Sea port of Yanbu to keep its crude moving to international markets.

Global price spike and reserve shortages 

The sudden loss of Saudi alternative routing coincides with a sharp spike in crude oil prices, pushing global fuel costs to record highs, fueling worldwide inflation, and driving US Treasury yields to levels unseen since the 2008 financial crisis.

The International Energy Agency expects total global oil supply to contract by 5.7 million barrels per day this year — a 6% drop that leaves major economies vulnerable amid a severe shortage in strategic oil reserves across importing nations.

Further compounding regional risks, Houthi fighters seized an island at the mouth of the Red Sea on Friday, raising fresh threats to the alternative shipping corridor as tanker movements through the Strait of Hormuz remain severely curtailed.