Saudi East-West Pipeline hit, outage may last weeks as oil prices jump

Saudi Arabia's East-West Pipeline, a key route for moving crude to the Red Sea for export, is expected to remain mostly out of service for weeks after it was hit in an attack, according to two regional officials. At the same time, Yemen's Houthi rebels have captured more islands along Red Sea shipping routes, adding fresh pressure on Saudi oil exports.

The twin developments pushed oil prices up by more than 2 per cent amid concerns over global supplies and the ability of the world's biggest exporter to get crude to market. The Iran war has already forced Saudi Arabia to move exports away from the Persian Gulf after Iranian attacks disrupted shipping through the Strait of Hormuz.

Saudi Arabia has relied on the 1,200-kilometre East-West Pipeline to carry crude from Gulf ports to Yanbu on the Red Sea, from where it is loaded on to tankers for export. The pipeline was shut after Thursday's attack, which Saudi Arabia blamed on drones launched by Iranian-backed militias in Iraq.

The two officials, who said they had been briefed on the matter, told The Associated Press that repairs, including work at a major pumping facility, could take three to five weeks. One official said the pipeline may operate partially during repairs, but neither could say how much oil would be able to pass through. They spoke on condition of anonymity because they were not authorised to brief the media.

According to Norway-based research firm Rystad Energy, the pipeline has been carrying an average of 2.6 million to 4 million barrels a day since late August. It said that amount would be lost to the market if the flow stopped completely. The firm said Brent crude, which rose to USD 109, showed that this "is a clear signal that the market is increasingly pricing in a significant loss of supply."

Aramco, which operates the pipeline, did not immediately respond to a request for comment. The government-run Centre for International Communication, which handles foreign media in the kingdom, said it was looking into an AP inquiry on how long repairs would take.

Meanwhile, government and Houthi officials said the Iranian-backed rebels had captured the strategic islands of Greater and Lesser Hanish, expanding their reach over Saudi shipping routes out of the Red Sea. The islands are about 160 kilometres north of the Bab el-Mandeb Strait, a choke point linking the Red Sea to the open ocean and Saudi Arabia's key Asian markets. The Houthi advance also brings them within 32 kilometres of the US military base in Djibouti, across the strait.

For more than a month, the Houthis have been attacking Saudi oil infrastructure and shipping in the Red Sea, adding to pressure on oil prices and increasing Iran's leverage in its war with the United States. According to two government officials and one Houthi official, the rebels moved on to the Hanish islands after hundreds of government-allied forces withdrew from the archipelago. All three spoke on condition of anonymity.

Last week, the Houthis also captured the port city of Mokha and the island of Mayun inside the Bab el-Mandeb Strait. Government forces are now trying to regroup. On Sunday, the military said it carried out airstrikes on Houthi positions in Mokha, the coastal town of Dhubab and elsewhere in Taiz province.

A Houthi spokesperson said the group fired dozens of missiles and drones at the King Khalid Air Base in Khamis Mushait in southern Saudi Arabia, targeting hangars, radar sites and ammunition depots. In a statement issued on Monday, Brig Gen Yahya Saree did not say when the strikes took place, though the Houthis often claim responsibility hours or days later. Saudi military spokesperson Maj Gen Turki al-Malki said the attacks hit civilian areas in Khamis Mushait and nearby cities, injuring 13 civilians and damaging several houses and vehicles. He did not say whether the air base was hit.

The attacks have further reduced Saudi export options. The International Energy Agency said Saudi oil production fell to 6 million barrels a day in August from nearly 10 million barrels a day in September last year because of the Iran war. Rystad Energy said the East-West Pipeline had been carrying a large majority of Saudi exports after the war began.

When Houthi attacks in the Bab el-Mandeb Strait began in late July, most tankers leaving Yanbu headed north through the Red Sea towards the Mediterranean, with cargoes moving through the Suez Canal or an Egyptian pipeline. That raised both the time and cost of supplying Saudi Arabia's main customers in Asia. The Houthis then expanded their attacks to Saudi shipping in the northern Red Sea as well.

Rystad Energy said a month-long shutdown of the pipeline would be a "large disruption" that would make crude deliveries slower and more expensive. It added that "the market could initially manage it," but warned that a longer closure would "require a major reallocation of global crude flows."

The fighting in Yemen is also worsening the humanitarian crisis and pushing the country back towards full civil war after a truce that had largely held since 2022. Even as they advanced along the Red Sea, the Houthis pressed an offensive inland, especially in Taiz province. The World Health Organisation said more than 500 people were killed in Yemen in the past week, up from nearly 200 a week earlier. The fighting has also displaced nearly 94,000 people.

In sum, the damage to Saudi Arabia's key oil pipeline and the Houthis' gains along the Red Sea have deepened concerns over oil supply routes, raised pressure on export movements and intensified the conflict in Yemen, where casualties and displacement are rising sharply.