Saudi pipeline outage threatens global oil supply

Saudi Arabia could run out of oil stocks for export within days if it fails to restart its major East-West pipeline to the Red Sea, potentially disrupting up to 4 per cent of global oil supply, according to Saudi oil buyers and traders.

The pipeline was shut on Friday after drone attacks, with estimates for repairs ranging from sooner than five to six weeks. Some sources said partial pumping could resume while repairs are underway.

The pipeline normally reroutes around 4 million barrels per day (bpd) to Yanbu on the Red Sea. With the route offline, Yanbu has enough stocks to maintain exports for five to seven days, while Saudi Arabia also holds several days of supplies at Egypt’s Ain Sukhna and Sidi Kerir ports, according to industry sources told Reuters.

Saudi oil supply fell to a more than three-decade low in August, while the International Energy Agency expects global oil supply to decline by 5.7 million bpd this year. Saudi Arabia told OPEC that its production fell to 6.2 million bpd in August from 10.9 million bpd in February.

Attribution: Reuters