Drone strikes knock out key Saudi oil pipeline, threatening global supply

Drone strikes on Saudi Arabia's key East-West pipeline have forced a complete shutdown, with regional officials warning it will take up to five weeks to repair the damage. The closure has choked off a vital bypass route that was keeping Saudi oil flowing to global markets despite the wartime blockade of the Strait of Hormuz, raising fears of a severe global supply shock.

The damage to a major pumping station at al-Mesabaah, southeast of Medina, was laid bare in satellite images released over the weekend. Industry sources say the Red Sea port of Yanbu, where the pipeline terminates, has only five to seven days of export stocks remaining. Unless pumping resumes, the world's largest crude exporter will effectively run out of oil to load onto tankers at the port within a week.

Two regional officials briefed on the situation said repairing the 1,200-kilometre pipeline will take between three and five weeks, though they suggested the line might operate at partial capacity while repairs are underway. Saudi Aramco, which operates the system, has not publicly commented on the timeline, and Riyadh has blamed the attack on drones launched by Iranian-backed militias in Iraq.

The timing could hardly be worse for global energy markets, which are already highly strained. Brent crude jumped more than 3 per cent to $108 a barrel on Monday, its highest level since May. In the United States, average diesel prices have already surged past $6 a gallon. Asian refiners, who are heavily dependent on Saudi crude, are reportedly scrambling for updates on whether their scheduled shipments will be cut.

For the past six months, the East-West pipeline had acted as Saudi Arabia's geopolitical insurance policy. The wider Middle East war—triggered by US and Israeli strikes on Iran on 28 February—has shut down the Strait of Hormuz, crippling oil exports from the Persian Gulf. By rerouting 4 million barrels a day, or roughly 4 per cent of global supply, across the Arabian Peninsula to the Red Sea, Saudi Arabia had managed to keep its exports moving.

That safety valve has now failed. While Saudi Arabia holds additional backup stocks at the Egyptian ports of Ain Sukhna and Sidi Kerir, industry sources say these reserves are not full and will eventually run out without the pipeline.

The attack coincides with a worsening security situation along the Red Sea. Yemen’s Iran-aligned Houthi rebels have stepped up strikes on shipping and recently seized the strategic island of Perim in the Bab al-Mandab strait.

Meanwhile, hopes for a diplomatic breakthrough have dimmed. Oman’s foreign minister, Sayyid Badr Albusaidi, announced that a regional summit scheduled for Monday had been postponed to seek a wider consensus. Iranian officials had been expected to attend the talks to discuss a proposal for governing shipping through the blockaded Strait of Hormuz. Instead, the region remains locked in a conflict now entering its seventh month, with its most critical energy corridor severely compromised.