Satellite images have revealed extensive damage to a key Saudi oil pipeline following reported drone strikes, as industry sources warn that a prolonged shutdown could put up to 4% of global oil supplies at risk.
Images released on Sunday appeared to show a pumping station on Saudi Arabia’s 1,200km [745-mile] East-West pipeline charred and badly damaged after the reported strikes.
Saudi Arabia has yet to disclose the full extent of the damage or how long the pipeline will remain offline.
The pipeline has become crucial to Saudi Arabia during the past six months, as the wartime closure of the Strait of Hormuz has disrupted oil flows from neighboring countries. Saudi Arabia has used the route to redirect about four million barrels of crude a day to the Red Sea port of Yanbu, equivalent to about 4% of global supply.
With the pipeline shut, Yanbu has enough stocks to maintain exports for only five to seven days, according to three industry sources familiar with Saudi exports cited in a relevant report by The Guardian.
A fourth source said Saudi Arabia also had stocks at Egypt’s Ain Sukhna and Sidi Kerir ports that could supply customers for several days. The four sources said those stocks were not full and would eventually run out unless the pipeline resumes operations.
Saudi oil buyers and traders said the kingdom could run out of oil stocks for export if the pipeline is not restarted within days.
The East-West pipeline has a capacity of seven million barrels per day and provides an alternative route for exporting Saudi crude away from the Persian Gulf.
Reuters sources offered differing estimates of the repair timeline. One said repairs could take up to six weeks, while another said the pipeline could be fixed sooner and might resume partial pumping while work continues.
Saudi Arabia’s government media office and energy ministry have not offered any estimates yet.
The disruption has added to pressure on already-tight global supplies. Brent crude rose more than 3.4% on Sunday to $108 a barrel, its highest level since May.
US diesel prices also hit a record on Friday, exceeding an average of $6 a gallon.
The pipeline shutdown comes as Saudi production has already fallen sharply. OPEC data showed output declining from 8.1 million barrels per day in July to 6.24 million in August, the lowest reported level since 1990.
Saudi Arabia’s Red Sea export route and oil infrastructure have faced pressure from retaliatory strikes by the Yemeni Armed Forces, who have been piling up pressure on Riyadh to end its attacks and siege against Yemen.
Source: Al-Ahed English News
