- Fighting escalated as the Houthis claimed to have downed a Saudi fighter jet, while Saudi Arabia said the Houthis fired a drone near the Muslim holy city of Mecca.
- Satellite images show damage at two pumping stations, and while some analysts expect repairs within weeks, the exact duration remains uncertain.
- Global oil prices have surged, with Brent crude hovering around $107 per barrel Wednesday, up 50% from its prewar level, and Goldman Sachs warned prices could rise to $120 a barrel if attacks continue.
- Analysts warned of a severe energy crisis with global implications, with Kpler analyst Amena Bakr calling the situation “disastrous” from an energy security angle.
- The shutdown of the East-West pipeline risks keeping 4% of the world’s oil supply from reaching international markets and driving energy prices even higher.
- The world could lose 120 million barrels of crude if the East-West Pipeline is offline for a month, according to Kpler estimates.
Saudi Arabia's East-West pipeline, a vital artery for oil exports, was shut down following an attack by an Iran-backed militia, raising fears of a severe energy crisis. The pipeline, which transports crude across the kingdom, risks keeping 4% of the world’s oil supply from reaching markets.
The conflict escalated as Saudi Arabia and the Houthi militia exchanged claims of attacks, with the Houthis asserting they downed a Saudi fighter jet. This situation has led to a spike in oil prices, with Brent crude hovering around $107 per barrel, a 50% increase from prewar levels. Analysts warn that if the pipeline remains offline for a month, the world could lose 120 million barrels of crude, significantly impacting global energy markets.6712
Amena Bakr, head of Middle East & OPEC+ Insights at Kpler, described the situation as “unprecedented” and “disastrous” for energy security. Goldman Sachs has projected that prices could soar to $120 a barrel if attacks continue. While Bakr estimates repairs could take five to six weeks, partial fixes might occur sooner. Robin Brooks from the Brookings Institution expressed skepticism about prolonged outages, suggesting that “nightmare scenarios” of extended downtime may not materialize.8910
“The East-West pipeline shutdown could keep 4% of the world's oil supply off the market, with Kpler estimating a loss of 120 million barrels if offline for a month. Satellite images show damage at two pumping stations, and analysts expect repairs to take five to six weeks, though partial fixes could come sooner.”
