Why the East-West pipeline closure matters for oil markets

Why the East-West pipeline closure matters for oil markets

Saudi Arabia has temporarily suspended operations on its 1,200km East-West oil pipeline after drones struck areas near Riyadh and Medina last Thursday. The route can carry roughly 4 million to 5 million barrels per day and sends crude to the Red Sea port of Yanbu, allowing Saudi Arabia to bypass the Strait of Hormuz.

The closure adds pressure to an already disrupted oil market. Saudi officials have not given a timetable for restoring normal operations; sources cited in the reporting put possible repairs at five to six weeks, while another source said the pipeline could restart sooner.

What happened to the pipeline

Saudi Arabia’s Ministry of Energy described the shutdown as a precautionary measure after the drone attack caused infrastructure damage and injuries in the Riyadh and Medina regions. Saudi officials said the pipeline was hit in two areas. Related coverage: Saudi Arabia rejects Houthi naval blockade as threat to key shipping lanes and energy supplies.

The Ministry of Foreign Affairs said the launch was traced to Maysan province in southeastern Iraq, near the Iranian border, where Iran-aligned armed groups have a longstanding presence. The attack followed a March strike near the Saudi-Aramco-ExxonMobil refinery in Yanbu that temporarily disrupted crude loadings from the port.

Key figures

  • Pipeline length: 1,200km (about 745–746 miles)
  • Maximum pipeline capacity: 7 million barrels per day
  • Recent East-West pipeline flows: about 2 million barrels per day in August
  • Estimated current Strait of Hormuz flows: 6 million to 9 million barrels per day, compared with about 20 million before the war

Why the closure matters beyond Saudi Arabia

The East-West pipeline, also known as the Petroline, was built in 1981 to move crude from oil fields near Abqaiq across the Arabian Peninsula to Yanbu. Saudi Arabia increased westbound crude shipments during the first five months of the conflict as shipping conditions through the Gulf and Red Sea deteriorated.

The pipeline’s closure limits Saudi Arabia’s ability to redirect exports away from the Strait of Hormuz at a time when Houthi attacks have made the Red Sea and Bab al-Mandeb routes more vulnerable. Export capacity also depends on storage facilities and tankers reaching the Red Sea safely. Read the context: Strait of Hormuz Attacks Escalate Tensions and Impact Global Energy Markets.

How long can supplies be buffered

Sources familiar with the incident said Yanbu had enough available stocks to sustain exports for about five to seven days if the pipeline remained closed. Facilities in Egypt’s Ain Sukhna and Sidi Kerir could provide additional Saudi oil supplies for several days.

That buffer comes as global inventories are falling. The International Energy Agency said Saudi oil supply reached a more than three-decade low in August and projected that world oil supplies would decline by about 5.7 million barrels per day this year, equivalent to 6 percent of global supply.

What could happen to prices

Oil prices have been partly cushioned by stockpiles and releases from strategic reserves, with Brent crude trading at about $70–$90 in recent months. The reporting says that continued regional disruption could deplete those reserves and increase upward pressure on prices.

The International Energy Agency warned in June that continued drawdowns could reach critical levels. Experts cited in the reporting said Brent could potentially rise to $150 a barrel if inventories approached exceptionally low levels. The effect would depend on the pipeline damage, the duration of the shutdown and further threats to Yanbu and regional shipping routes.

What happens next

The immediate next step is assessment and repair of the damaged sections, but Saudi officials have not set a public restoration timetable. Estimates cited in the reporting range from an earlier restart to five or six weeks of repairs.

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