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Saudi pipeline outage threatens loss of 4% of global oil supply
Reuters • • world
Key Points:
- Saudi Arabia risks exhausting its oil export stocks within days if it does not restart its major east-west pipeline to the Red Sea, potentially causing a 4% reduction in global oil supply.
- The pipeline was shut down following drone attacks, with repair time estimates ranging from a few days to up to six weeks, though partial pumping may be possible during repairs.
- The shutdown exacerbates an already tight global oil supply situation, which has driven fuel prices to record highs and contributed to global inflation and rising U.S. bond yields.
- Saudi Arabia previously used the pipeline to transport about 4 million barrels per day, circumventing disruptions at the Strait of Hormuz, but current Red Sea port stocks can only sustain exports for five to seven days.
- Saudi oil production has fallen significantly from 10.9 million bpd in February to 6.2 million bpd in August amid ongoing regional conflicts and export challenges.
