Saudi Pipeline Outage Could Cut Global Oil Supply by 4%

Saudi Arabia is at risk of running out of oil stocks for exports if it does not restart its major east-west pipeline to the Red Sea within days. This pipeline, which has been crucial for rerouting around 4 million barrels per day, is currently offline due to drone attacks.

Industry sources indicate that the damage could take five to six weeks to repair, although partial operations may resume sooner. The port of Yanbu, which relies on this pipeline, has only enough stocks for five to seven days of exports.

The International Energy Agency (IEA) reported that Saudi oil supply has already fallen to a three-decade low, with global oil supply projected to decline by 5.7 million barrels per day this year. The situation is further complicated by Houthi fighters in Yemen, who have threatened Saudi oil shipments and seized an island at the mouth of the Red Sea.