Saudi Arabia has temporarily shut its strategic East-West oil pipeline following a drone attack as escalating conflict across the Middle East threatens both major maritime routes used to transport Gulf energy supplies to global markets.
The 1,200-kilometre pipeline has recently been transporting between four million and five million barrels of crude per day, equivalent to roughly four to five per cent of global oil supply.
Saudi Arabia’s Energy Ministry said the shutdown was a precautionary measure while authorities assessed the damage.
The incident is particularly significant because the pipeline has served as an alternative export route while tanker traffic through the Strait of Hormuz has been severely disrupted by the conflict involving the United States and Iran.
Attack Came From Iraq, Saudi Arabia Says
Saudi authorities said drones involved in the attack originated from Iraq, where Iran-aligned militias maintain influence.
Baghdad condemned the attack and subsequently dismissed a military commander responsible for operations in Maysan province, which borders Iran.
Iraq also ordered the closure of the Shalamcheh border crossing with Iran as security forces searched for those responsible.
Riyadh has so far refrained from immediate retaliation following a request from the Iraqi government, although Saudi authorities said the kingdom reserved the right to take measures necessary to protect its interests.
Houthis Seize Strategic Island
The pipeline disruption is occurring alongside another potentially consequential development.
Iran-aligned Houthi forces in Yemen have seized Perim, also known as Mayun Island, at the entrance to the Bab el-Mandeb Strait.
The narrow waterway connects the Red Sea with the Gulf of Aden and forms part of one of the world’s most important shipping routes between Asia and Europe.
Control of territory overlooking Bab el-Mandeb gives the Houthis greater ability to threaten commercial shipping.
That creates a potentially dangerous combination.
Shipping through Hormuz has already been disrupted, while instability around Bab el-Mandeb threatens the alternative route through the Red Sea.
Oil Returns Above $100
The escalation has contributed to crude prices climbing back above $100 per barrel.
The International Energy Agency has warned that global oil supply could decline by about 5.7 million barrels per day in 2026, significantly worse than previously projected as conflict delays the restoration of normal Gulf exports.
Saudi production has fallen sharply amid the disruption.
For importing economies, sustained oil prices above $100 could translate into higher petrol and diesel prices, increased transportation costs and renewed inflationary pressure.
The pipeline attack therefore extends well beyond Saudi Arabia.
With two of the world’s most strategically important energy corridors simultaneously under pressure, the Middle East conflict is increasingly becoming a global economic and energy-security crisis.
