Oil prices little changed as market awaits updates on Saudi pipeline outage
Oil prices little changed as market awaits updates on Saudi pipeline outage. Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuKey PointsSaudi Arabia's closure of the East-West pipeline has put more than 4 million barrels a day of crude export capacity at risk, forcing additional volumes toward the Strait of Hormuz.
What happened
Prices are unlikely to fall below $100 per barrel anytime soon, analysts said, with traders increasingly pricing in a significant loss of regional supply as Saudi Arabia scrambles to restore a crucial pipeline. Saudi Arabia's closure of the East-West pipeline, a highly strategic network that transports crude oil from Abqaiq on the kingdom's eastern Gulf coast to the port of Yanbu on the Red Sea, has put 4 million barrels per day at risk and driven a sharp spike in crude prices.
"The broader Middle East conflict is already putting a premium on crude, and the loss of Saudi Arabia's East-West pipeline adds another major constraint," Janiv Shah, vice president of oil markets for Rystad Energy, said in a research note. Analysts warn oil prices could rally sharply if the pipeline remains offline beyond an estimated five-to-seven-day inventory cushion. Saudi Arabia's crucial East-West pipeline that circumvents the Strait of Hormuz is pumping oil at its full capacity of 7 million barrels a day, according to a person familiar with the matter.
"The relatively contained price reaction suggests the market still expects Saudi inventories to cushion exports in the near term, but if the disruption extends beyond the five-to-seven-day inventory cushion, that could change quickly," Shah said. Rapidly depleting oil inventoriesSaudi Arabia on Friday temporarily closed the East-West pipeline as a precautionary measure following multiple attacks by drones launched from Iraq.
The wider picture
Several people were injured in the strikes, the Saudi government said, with drones targeting a key stretch of the pipeline in the Riyadh and Medina regions. Saudi Arabia has relied on the East-West pipeline to shift crude exports away from the strategically vital Strait of Hormuz as fighting continues between the U. Vantor satellite image shows fire damage and extensive blackened areas in and around the East-West pipeline pumping station in Saudi Arabia following the September 11, 2026 drone attack and resulting fires.
The attack on the East-West pipeline has removed an export route carrying more than 4 million barrels per day, which will now need to be routed through the Strait of Hormuz, Soltvedt said, noting that daily volumes through the waterway are volatile and typically average only around half of their pre-conflict levels. watch nowVIDEO5:0105:01Gulf countries are 'seriously mobilizing' to fix oil supply shortageAccess Middle EastIt took just a few days for Saudi Arabia to restart the East-West pipeline the last time it was attacked, although the damage does appear to be "more serious" this time, according to Laura James, deputy director and senior Middle East analyst at Oxford Analytica.
Crude oil held on to Monday's gain amid reports of fresh Houthi strikes on Saudi Arabia and Iranian attacks on Persian Gulf shipping. Global oil inventories have already fallen by around 1 billion barrels, leaving the market with less room to absorb further disruptions from the Middle East conflict. 1@LCO27G@LCO26XFollow your favorite stocksCREATE FREE ACCOUNTA Saudi Aramco gas station in Santiago, Chile, on Friday, March 27, 2026. Cristobal Olivares | Bloomberg | Getty ImagesThe global oil market is running out of safety nets.
What has been reported
S. and Iran, a lightning ground offensive by the Iran-backed Houthis along the Red Sea coast and a fresh wave of attacks on Saudi Arabia, the world's largest crude oil exporter. Analysts have emphasized that the clock is ticking for Riyadh to repair what appears to be significant damage to one of the East-West pipeline's pumping stations, warning that the longer the shutdown, the bigger the price shock. Maxar | Maxar | Getty ImagesAmple global inventories and stockpiles have historically acted as a crucial buffer to keep a lid on oil prices during previous crises.
"But every day Hormuz stays closed the oil market tightens, and the risk is asymmetrically to the upside. "A 'growing feedback loop'Satellite images showing the extent of the damage to the East-West pipeline have prompted some to conclude it could a long time to repair, with Andy Lipow, president of Lipow Oil Associates, suggesting it might take months. The damage to the pipeline and delays to its repair "underscore the growing feedback loop from the regional conflict," according to Torbjorn Soltvedt, principal Middle East analyst at risk intelligence company Verisk Maplecroft.
"But even, of course, once the pipeline is restarted, we still have the problem of the Bab el-Mandeb and whether oil can get out that way," James told CNBC's "Access Middle East" on Monday. The development is more bad news for consumers — and comes against a backdrop of renewed hostilities between the U.
What happens next
International benchmark Brent crude futures for November expiry rose 0. 29 per barrel on Tuesday morning, extending gains after jumping more than 21% over the past month. West Texas Intermediate futures for October expiry, meanwhile, traded 1. The contract, which is up over 25% over the past month, surpassed $100 for the first time since May last week. The roughly 750-mile system is estimated to have a total design capacity of 7 million barrels per day, following recent expansions. However, analysts have raised the alarm in recent weeks that these safety nets are rapidly evaporating due to the ongoing Middle East conflict.
Inventories have already been drawn down by around 1 billion barrels, according to Paul Gooden, head of natural resources at investment manager Ninety One.