Saudi pipeline that bypasses Hormuz shut after attacks
The East-West pipeline has proved to be a critical lifeline for Saudi Arabia’s oil exports, which were disrupted by the war in Iran.
Hormuz Closure Chaos$HCC
Saudi Arabia said it closed its East-West oil pipeline, a key alternative route to the Strait of Hormuz, following multiple attacks on Thursday.
The conduit was shut as a precautionary measure, the Ministry of Energy said on Friday in a post on social media.
The attacks caused several injuries and emergency teams are taking steps to secure the pipeline and assess its safety, the ministry said.
Fighting has intensified across the Middle East in recent days. Yemen-based Houthis said they targeted Saudi’s energy facilities in Abha, Najran and Jazan while the US conducted strikes targeting Iranian oil tankers.
Oil prices were little changed after the ministry’s statement, with Brent futures trading at about US$105 a barrel. Brent surged to almost US$110 on Thursday on speculation about the impact of the latest violence on energy supplies in the region.
The East-West pipeline has proved to be a critical lifeline for Saudi Arabia’s oil exports, which were disrupted by the war in Iran. The 7 million barrel-a-day route quickly reached full capacity after tanker traffic came to a near standstill in the Strait of Hormuz.
The pipeline moves oil away from the Persian Gulf towards the Red Sea, where it can be loaded on tankers. However, that route has come under pressure from Houthi attacks.
The kingdom’s oil exports slumped to just about 3 million barrels a day in August, the lowest in records going back to early 2017, as ships have come under attack in the Red Sea from Houthi militants.
As oil prices climb to fresh peaks, fuel prices are also surging. US average petrol prices at the pump are hovering above US$4 a gallon, the highest for this time of year, while average retail diesel prices have skyrocketed to a record US$6 a gallon.