Saudi Arabia’s Oil Lifeline Just Went Down. The World May Be Running Out Of Time

Saudi Arabia could run out of oil available for export within days after an attack shut down a critical pipeline used to bypass the Strait of Hormuz.

The kingdom has enough crude stored at the Red Sea port of Yanbu to maintain current export levels for roughly five to seven days without new supplies flowing through its East-West Pipeline, Reuters reported Sunday citing Saudi oil buyers and traders. If the pipeline remains offline, the world risks losing as much as 4% of its oil supply.

“This is a big outage for the Kingdom, and the damage to its East-West Pipeline appears much more severe than the relatively minor hit it took in April. Saudi storage farms in Egypt can fill in for the pipeline’s lost flows for perhaps a week, but a lingering shutdown beyond that would short global supply by about 4 million barrels per day,” energy public policy analyst David Blackmon told the Daily Caller News Foundation.

“Crude prices jumped 3% in overnight trading on the news, and U.S. gasoline prices will follow in the coming days. This incident, combined with lingering problems at the straits of Hormuz and Bab el-Mandeb, is likely to force gas prices at the pump even higher until they are favorably resolved,” Blackmon added.

The nearly 750-mile East-West Pipeline — owned by state-controlled oil company Saudi Aramco — was moving roughly four million barrels of crude per day toward Yanbu before an attack forced it offline, according to Reuters. Industry estimates for restoring the pipeline vary, with some sources telling the outlet repairs could take five to six weeks while others expect partial operations to resume sooner.

The potential loss comes as the International Energy Agency (IEA) warns that the Iran war and prolonged disruptions to Persian Gulf energy flows are creating an increasingly tight global oil market.

Global oil supply is projected to fall by 5.7 million barrels per day in 2026, or roughly 6%, Reuters reported Friday, citing the IEA’s September Oil Market Report. The agency previously projected a smaller decline as it expected normal Middle Eastern oil flows to return sooner.

Saudi Arabia has taken a particularly significant hit, with crude supply falling by 2.3 million barrels per day in August to roughly six million barrels per day, its lowest level in more than three decades, according to Reuters.

The supply squeeze is also draining the world’s oil reserves as inventories make up for missing production. Global oil stocks fell by roughly 3.1 million barrels per day in August to their lowest level since 2023, the outlet reported Friday.

The latest blow to Saudi Arabia’s oil infrastructure threatens to tighten an already strained global market even further.

The Escape Route Around Hormuz Is Under Fire

The East-West Pipeline, also known as Petroline, has taken on heightened importance as the Iran war disrupts traditional routes used to move Middle Eastern oil to the rest of the world.

The pipeline carries crude from Saudi Arabia’s oil-producing Eastern Province across the Arabian Peninsula to Yanbu on the Red Sea, allowing the kingdom to export oil without sending it through the Strait of Hormuz.

Before the Iran war began Feb. 28, roughly 125 to 140 commodity vessels passed through the strait each day, while approximately one-fifth of global petroleum liquids consumption moves through the critical waterway.

The East-West Pipeline was subsequently shut down after a drone attack, Reuters reported Sunday. Satellite imagery circulated online last week appeared to show a massive smoke plume along the pipeline in the Saudi desert between Medina and Mahd adh Dhahab. NASA FIRMS data also detected significant heat readings clustered along a stretch of less than 10 kilometers for hours.

The shutdown comes as Iran-aligned Houthi forces escalate attacks on Saudi Arabia and advance along Yemen’s Red Sea coast toward the Bab el-Mandeb Strait, a critical shipping route connecting the Red Sea with the Gulf of Aden, according to Reuters.

The Houthis attacked Saudi energy facilities with drones and ballistic missiles earlier this month, wounding 73 people and forcing some operations to temporarily shut down as fires broke out, according to Reuters. The group said it targeted Saudi Aramco facilities in Abha, Najran and Jizan, along with an air base in Khamis Mushait.

Saudi Arabia has increasingly relied on its Red Sea coast as the war restricts tanker traffic through Hormuz. Crude and condensate loadings at Yanbu reached 3.7 million barrels per day in September, up from 3.2 million barrels per day in August, according to Vortexa data.

The East-West Pipeline was supposed to give Saudi Arabia an escape route when oil could not safely move through Hormuz. The kingdom has moved between 4 million and 5 million barrels per day through the pipeline in recent months, equivalent to roughly 4% to 5% of global supply, according to Reuters. Its shutdown now threatens the alternative route just as Saudi Arabia increasingly needs it.

Brent crude jumped 2.8% Monday to $107.55 per barrel, while U.S. West Texas Intermediate climbed 2.4% to $102.49, according to the Wall Street Journal (WSJ).

The disruption could also squeeze refiners dependent on Middle Eastern crude. A prolonged outage at Yanbu could force global crude supplies to be reallocated and strain tanker availability, potentially hitting Asian refiners particularly hard, the WSJ reported citing Rystad Energy.

Americans Are Already Paying For The Energy Crunch

The consequences of the Middle East’s energy crisis are already reaching American consumers thousands of miles from the damaged Saudi pipeline.

The national average price for diesel blew past $6 per gallon Friday for the first time, reaching $6.06 compared with $3.71 one year earlier, according to AAA, a roughly 63% increase.

Diesel stood at roughly $3.72 per gallon before the Iran war began in February, meaning prices have risen by approximately 60% in a little more than six months.

Trucks moved 11.27 billion tons of freight in 2024, accounting for 72.7% of domestic freight tonnage, according to the American Trucking Associations. Higher diesel costs therefore hit companies responsible for moving food, packages, construction materials and other goods across the country.

The pressure is also working its way through America’s food supply chain. Food prices were 2.7% higher in August than one year earlier, while grocery prices climbed 2.2%, fruits and vegetables increased 3.2% and nonalcoholic beverages rose 3.7%, according to Bureau of Labor Statistics data.

Farmers can get squeezed from multiple directions when energy prices rise. Agricultural equipment relies heavily on diesel, while natural gas is a major input in fertilizer production, according to the U.S. Energy Information Administration.

U.S. farm spending on fertilizer, lime and soil conditioners is projected to increase 15.3% in 2026, an increase of roughly $5.3 billion, according to the Department of Agriculture.

The International Energy Agency (IEA) described flows through the Strait of Hormuz as “severely constrained,” with Gulf diesel and gasoil exports averaging just 390,000 barrels per day in August, slightly more than one-quarter of their pre-war levels.

Global oil supply is projected to fall by 5.7 million barrels per day in 2026, while a full recovery in Middle Eastern oil supplies has been pushed into 2027, according to the IEA’s September Oil Market Report.

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