Saudi Pipeline Damage Worsens Global Energy Crisis

Saudi Arabia risks completely depleting its oil reserves intended for export if it fails to quickly restore operations on a key pipeline running from the east to the west of the country. Following Friday's drone attacks, Riyadh was forced to shut down the route.

The outage directly threatens the supply of 4 million barrels per day, representing approximately 4% of global oil supplies. Storage capacity at the key port of Yanbu on the Red Sea, combined with reserves in Egypt, can now sustain exports for only five to seven days.

According to industry sources, repairs to the damaged pipeline could take five to six weeks.

This new disruption is worsening an already critical situation in the global market. Oil supplies from the Middle East have fallen sharply as a result of the war-induced closure of the Strait of Hormuz and the latest attacks by Yemeni Houthis in the Red Sea. Saudi Arabia's production fell to 6.2 million barrels per day in August, the lowest level in more than three decades.

The International Energy Agency estimates that global oil supplies will fall by 6% this year, continuing to drive fuel prices to record highs and fuel global inflation.

(Reuters, max)