Saudi Arabia shuts key oil pipeline after attacks, lifting crude prices

Saudi Arabia has shut down the East-West pipeline that carries crude from its eastern oilfields to the Red Sea coast, after attacks on Thursday caused injuries in the Riyadh and Madinah regions. The move removes a critical alternative route for Gulf crude exports that bypasses the Strait of Hormuz, and it has added fresh momentum to a week of sharp oil price gains. Benchmark Brent settled at $104.56 a barrel on Friday, up more than 8 percent over the week, while US diesel prices hit a record $6 a gallon earlier in the week.

The pipeline, stretching roughly 1,200 kilometers from the kingdom’s main producing fields to the port of Yanbu, has grown in strategic importance since the start of the conflict with Iran. It has allowed Saudi Arabia to maintain exports of millions of barrels per day even when Iranian restrictions have impeded tanker traffic through the Strait of Hormuz, the narrow waterway through which a substantial share of global oil supplies normally passes. The energy ministry described the shutdown as a precautionary measure and said emergency and technical teams had responded to secure the line and assess its safety, without indicating how long operations would remain suspended.

The attack on the pipeline came amid a broader escalation by Iran-backed Houthi rebels, who this week fired waves of missiles and drones into Saudi Arabia, targeting energy facilities in the south. Satellite images on Thursday showed multiple plumes of smoke near the pipeline, and CNN reported, citing an unnamed US official, that the pipeline had been hit by drones originating from Iraq, where Iran-backed militias have previously struck the kingdom during the US and Israel’s war with Iran.

The immediate market reaction reflects more than the physical damage to a single piece of infrastructure. The Houthi offensive in Yemen has also cemented rebel control over the Bab al-Mandeb Strait, the narrow waterway linking the Red Sea with the Gulf of Aden. That development threatens the southern route for tanker traffic and, combined with the pipeline closure, narrows the options available to Saudi Arabia for getting crude to international buyers. Helima Croft of RBC Capital Markets described the situation as a Houthi blitzkrieg threatening to close the main oil relief valve for the seven-month war, and raised the question of whether the United States would intervene to protect the waterway or remain reticent about engaging on a second front.

The pipeline has been attacked before. In April, operations were rapidly restored by Saudi Aramco, the national oil company, and the kingdom subsequently increased volumes flowing through the line, reaching nearly 8 million barrels per day in June, according to estimates from the International Energy Agency. But recent weeks have seen constraints re-emerge, as Houthi attacks on Saudi tankers in the Red Sea have reduced shipments. Exports from Yanbu fell to just 2.5 million barrels per day in August, the lowest level since 2013, according to the IEA’s latest monthly report.

A Saudi official declined to comment on whether the US had decided against helping in the fight against the Houthis, but said the kingdom was working closely with its partners, including the United States, to ensure freedom of navigation in the Arabian Gulf and Red Sea. The timing is politically sensitive, with US midterm elections weeks away and domestic fuel prices already a source of pressure on the Trump administration.

The episode underscores how fragile the region’s oil export routes have become. Even a pipeline designed specifically to reduce dependence on the Strait of Hormuz is now exposed to attack from multiple directions, and the combination of threats to both the strait and the Bab al-Mandeb leaves little redundancy in the system. The speed of restoration will be watched closely by markets, but the deeper question is whether Saudi Arabia can sustain export volumes in an environment where its infrastructure is increasingly in the crossfire.