Saudi Arabia’s critical East-West oil pipeline was shut down as a precautionary measure following multiple drone attacks on Thursday, according to the Ministry of Energy. These attacks, launched from Iraq, caused several injuries and necessitated emergency teams to secure the pipeline and assess its safety. This 745-mile pipeline is vital as it allows Saudi Arabia, the world's largest crude oil exporter, to bypass the Strait of Hormuz, through which about 20% of global oil used to transit before recent regional conflicts.
The shutdown significantly impacts global oil supplies, with the pipeline typically moving 4% to 5% of the world's oil, as reported by Reuters. The attacks, which saw satellite images showing scorched ground and smoke near the site, prompted Saudi Arabia to close the pipeline, though it has stated it will not retaliate for now, following a request from Iraq's prime minister. However, Riyadh reserves the right to take necessary measures to protect its sovereignty and critical facilities.
Following these developments, oil prices surged, ending the week above $100 a barrel for the first time since mid-May. The incident underscores heightened geopolitical risks in the Middle East and their immediate impact on global energy markets, particularly given the pipeline's role as an alternative route to the Strait of Hormuz, which has been affected by escalating tensions.
