A critical Saudi oil pipeline to the Red Sea was recently attacked by Iran, reducing daily oil flow by 700,000 barrels. According to sources, this pipeline is currently a major route supplying global markets.
Reports from the country's official news agency indicate that the attack hit a pumping station on an east-west pipeline. This pipeline transports crude from processing facilities near the Persian Gulf to an export terminal called Yanbu on the Red Sea.
Saudi Arabia has relied on this pipeline, which has a daily capacity of 7 million barrels, as its primary means of exporting crude during the conflict with Iran. Due to Iran's attacks, Riyadh is unable to export crude through the Strait of Hormuz.
Attacks on production facilities at Saudi Arabia's Manifa and Khurais oilfields have reduced the country's daily output by 600,000 barrels, as reported by the Saudi Press Agency. Multiple refineries have also been targeted.
The state-run SPA agency stated on Thursday that the latest attacks, including previous strikes on certain facilities, have also disrupted operations at major oil, gas, refining, petrochemical, and power sites in Riyadh, the Eastern Province, and Yanbu Industrial City.
Damage to Saudi Arabia's energy infrastructure is expected to worsen the large-scale disruption in global oil supplies caused by Iran's attacks on tankers in the Strait of Hormuz.
Matt Smith, an oil analyst at energy data analytics firm Kpler, commented, "The east-west pipeline is diverting so much Saudi crude that cannot exit via the Strait of Hormuz. Any drop in exports will intensify an already tense situation. This is not good news for the market."
In an interview with CNBC on Thursday, Smith noted that Gulf oil-producing countries have shut down approximately 13 million barrels per day of production due to disruptions in the strait.
The United States agreed to a two-week ceasefire on Tuesday in exchange for Iran allowing vessel passage through the strait. However, the CEO of a UAE state-owned oil company stated on Thursday that the strait remains effectively closed and impassable.
Sultan Ahmed Al Jaber, CEO of Abu Dhabi National Oil Company, emphasized that Iran has made it clear that vessels must obtain its permission to pass through the strait.
"Clarity is needed at this moment," Jaber wrote in a social media post. "So let's be clear: the Strait of Hormuz is not open. Passage is being restricted, constrained, and controlled."
The strait connects Gulf oil producers such as Saudi Arabia and the UAE with global markets. Prior to the U.S. and Israeli attack on Iran on February 28, around 20% of the world's oil supply traveled through this waterway.
As conflict spreads across the region, attacks on major oilfields, pipeline infrastructure, and refining centers highlight the risks facing global energy supplies. Saudi Arabia, the world's largest oil exporter, plays a central role in global crude markets. Prolonged disruptions to its production, refining systems, or export routes could lead to supply tightness and increased price volatility.
Sources indicate that continued attacks will reduce supplies and slow recovery, affecting energy security in consumer nations and exacerbating volatility in oil markets. According to SPA, the ongoing disruptions have already depleted a significant portion of operational and emergency inventories, limiting the ability to compensate for supply shortages.
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