Saudi Arabia pipeline outage threatens 4% global oil supply loss

Saudi Arabia's oil exports are under threat as its major east-west pipeline remains shut following drone attacks on Friday. Traders and sources warn that if pumping does not resume within days, the kingdom could lose up to 4% of global oil supply. The pipeline, which normally reroutes about 4 million barrels per day to the Red Sea port of Yanbu, is crucial for bypassing the Strait of Hormuz.

With the pipeline out of service, Yanbu has enough oil stocks to maintain exports for only five to seven days, according to industry sources. Saudi Arabia also holds smaller reserves in Egypt. Some sources suggest the pipeline damage could take as long as five to six weeks to repair, while others believe partial pumping could resume sooner.

The shutdown exacerbates an already tight global supply situation, which has driven fuel prices to record highs. The International Energy Agency has forecast a 6% decline in world oil supply this year.