Oil prices jumped after Saudi Arabia shut down its critical East-West pipeline following multiple attacks on September 11, 2026. This disruption further exacerbates a global energy crisis, as the pipeline serves as a vital route for crude oil to reach Red Sea ports, particularly important for bypassing the Strait of Hormuz during the ongoing US-Iran conflict. The pipeline, with a capacity of approximately 7 million barrels a day, is crucial for maintaining Saudi oil exports.
The shutdown poses a significant threat to global oil supply, with some analysts suggesting a potential loss of up to 4% of the world's supply if the pipeline remains offline. Saudi Arabia reportedly has oil stocks in ports sufficient for only 5-7 days to maintain exports, necessitating a swift resumption of pipeline operations to avert a major drop. The exact duration of repairs has not been disclosed by Saudi authorities.
The broader conflict between the US and Iran has already driven crude prices up by 76% in 2026, creating market instability. Brent crude futures rose by $3.62, or 3.46%, to $108.23 per barrel, while WTI futures increased by $3.15, or 3.15%, to $103.20 per barrel. This surge in oil prices is contributing to global inflation, affecting gasoline and diesel costs, and increasing the likelihood of interest rate hikes from central banks like the US Federal Reserve.
Satellite images have shown significant damage to a pumping station on the 1,200km East-West pipeline. Reports indicate that the attacks were launched from inside Iraq. This incident further complicates the regional energy landscape, especially with Yemen's Iran-aligned Houthi forces expanding their control in strategic waterways, including the Bab al-Mandab strait.
