3 hrs ago
Saudi Pipeline Outage and Houthi Moves Lift Oil Prices
Oil prices went up because several important oil routes may be disrupted.
A drone strike shut a major Saudi pipeline that carries oil to the Red Sea.
This pipeline normally moves about 4 million barrels of oil each day.
Saudi Arabia has enough oil stored near the pipeline’s destination to keep exports going for only about five to seven days.
It is not yet clear how long repairs will take.
At the same time, Houthi fighters reached an island near the Bab el-Mandeb Strait.
That strait is an important passage for ships carrying oil.
Oil traffic through the Strait of Hormuz has also fallen during the war.
If these problems continue, less oil could reach world markets and prices could rise further.
Brent crude rose 2.77% to $107.51 a barrel, while West Texas Intermediate gained 2.27% to $102.32.
A drone strike shut Saudi Arabia’s East-West oil pipeline, which had been carrying about 4 million barrels per day to Yanbu.
Saudi crude stocks at Yanbu may support exports for only five to seven days, while repair estimates range from weeks to an earlier partial restart.
Houthi fighters reached Perim island near the Bab el-Mandeb Strait, raising concerns about disruptions to another major oil-shipping route.
The International Energy Agency said global oil supply could decline by 5.7 million barrels per day this year if Gulf disruptions persist.
- Who
- Saudi Arabia, Houthi fighters, oil traders, and the International Energy Agency are central to the report.
- What
- Oil prices rose as a Saudi pipeline outage and risks around key shipping routes threatened global crude supplies.
- Where
- The disruptions involve Saudi Arabia’s East-West pipeline, Yanbu, the Bab el-Mandeb Strait, the Red Sea, and the Strait of Hormuz.
- When
- Prices rose on Monday after a drone strike on Friday; the report also cites supply estimates for this year.
- Why
- The pipeline shutdown and growing risks around major shipping passages could reduce oil supplies reaching global markets.
Key facts
- Brent price
- $107.51 per barrel, up $2.90 or 2.77%
- West Texas Intermediate price
- $102.32 per barrel, up $2.27 or 2.27%
- Saudi pipeline capacity
- About 4 million barrels per day, roughly 4% of global oil supply
- Yanbu stock duration
- Approximately five to seven days of Saudi crude exports
- Bab el-Mandeb oil flows
- About 4% to 5% of global oil supplies in recent months
- International Energy Agency forecast
- Global oil supply could decline by 5.7 million barrels per day, or about 6%, this year
- Repair estimates
- Reports range from five to six weeks to a possible earlier partial restart
Sources
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