Oil prices rise after Saudi Arabia shut down critical pipeline that bypasses Strait of Hormuz
Oil Prices Jump After Saudi Pipeline Closure
Crude oil markets surged on Sunday after Saudi Arabia halted operations on its East‑West pipeline, a key route that bypasses the Strait of Hormuz. The shutdown prompted a sharp rise in benchmark prices, underscoring concerns about supply disruptions in a region already fraught with tension.
Futures Rally
U.S. West Texas Intermediate futures climbed 2.8%, reaching $102.87 a barrel by 6:27 p.m. Eastern Time. At the same time, Brent crude, the global reference, advanced 3.1% to $107.87 a barrel. Traders cited the loss of the 7‑million‑barrel‑per‑day pipeline as a catalyst for the price gains.
Drone Attack Triggers Closure
On Thursday, drones launched from Iraq struck the East‑West pipeline, inflicting damage that forced Saudi officials to shut the line. Riyadh has not disclosed the precise extent of the damage or how long the pipeline will remain offline. The conduit runs the length of the kingdom, linking oil‑producing fields near the Persian Gulf with export terminals on the Red Sea coast, and has been a cornerstone of Saudi efforts to divert crude away from the vulnerable Hormuz corridor.
Diplomatic Meeting Delayed
A regional summit intended to address the Hormuz situation—originally set for Monday in Oman—was called off after the pipeline attack. Oman's Foreign Minister Badr Albusaidi posted on social media: “In the interests of consensus the regional meeting set for tomorrow in Salalah has been postponed.” He added, “We remain committed to fostering dialogue that supports stability and lasting cooperation in our region.”
Ongoing Security Threats
The security environment in Hormuz stayed volatile on Sunday when a tanker suffered a severe onboard fire after being attacked, according to the United Kingdom Maritime Trade Operations Center. The incident highlighted the persistent danger to vessels navigating the narrow strait, a chokepoint for a sizable share of the world’s oil shipments.
Pipeline’s Market Role
Saudi Aramco CEO Amin Nasser, speaking on the company’s August earnings call, asserted that the East‑West pipeline has been more influential in stabilizing oil markets than the United States’ large‑scale strategic reserve releases. The line’s capacity to move 7 million barrels daily has helped mitigate the supply shock triggered by the ongoing Iran‑U.S. confrontation over Hormuz.
Escalating Regional Attacks
In recent days, Iran‑aligned militant groups have intensified strikes against Saudi interests. Houthi forces in Yemen targeted energy facilities and civilian infrastructure within the kingdom early last week, injuring more than 70 people, as reported by Saudi state media. The Houthis have also reportedly seized the strategic Perim Island in the Bab el‑Mandeb Strait after capturing the port city of Mokha on Yemen’s western coast, positioning them to threaten oil flows through the waterway that links the southern Red Sea to global markets.
Outlook for Oil Supply
The combined effect of the pipeline shutdown, the tanker attack, and the broader pattern of militant activity has heightened uncertainty about oil supply continuity in the region. Market participants will be watching closely for any indication from Saudi authorities regarding repairs to the East‑West line and for further diplomatic developments that could either de‑escalate or intensify the current standoff.
Source: cnbc.com · 2026-09-13