Saudi Pipeline Shutdown Threatens 4% of Global Oil Supply

Saudi Arabia faces a critical race to restart its East-West oil pipeline after drone attacks forced a shutdown on Friday, with industry sources warning that storage at the Red Sea port of Yanbu could sustain exports for only five to seven days. The pipeline, which normally carries about 4 million barrels per day, roughly 4% of global supply, has been the kingdom's primary alternative to the Strait of Hormuz for six months amid ongoing regional conflict. The outage threatens to deepen a global supply crunch that has already pushed fuel prices to record highs and fueled inflation worldwide. The International Energy Agency reported that Saudi oil supply fell to its lowest level in more than three decades in August, and projects global oil supply will decline by 5.7 million barrels per day this year. Sources familiar with Saudi export operations told Reuters that Yanbu's storage capacity stands at approximately 35 million barrels, but stocks are not full. Saudi Arabia also maintains reserves at Egypt's Ain Sukhna port on the Red Sea and Sidi Kerir on the Mediterranean, which could supply customers for several additional days.