The closure of Saudi Arabia's East-West pipeline, recognized as one of the country's main routes to bypass the Strait of Hormuz, could have significant impacts on the global oil market. This pipeline, which will be out of service for several weeks due to damage, was an important alternative for crude oil supply during critical times.
Details of the Pipeline Situation and Its Impacts
Two regional officials stated that the East-West pipeline is likely to be out of service for several weeks to repair the damages. Buyers and traders of Saudi oil also pointed to the risk of reduced exports, stating that the reserves at the Red Sea port of Yanbu can only sustain exports for five to seven days. This means that up to 4% of global crude oil supply may be at risk.
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Strategic and Economic Consequences
Victoria Silva, a senior researcher at RBC Capital Markets, stated that the closure of this pipeline means the loss of one of Saudi Arabia's most important side routes in wartime conditions. She added, "We are now facing a three to five-week closure of the pipeline. This route has acted as a main lifeline for Saudi Arabia so far." This situation, along with recent Houthi attacks on the Bab al-Mandab Strait, has severely impacted Saudi Arabia's ability to supply oil.
Experts believe that given the current circumstances, there is no alternative to reopening the Strait of Hormuz. The Strait of Hormuz, recognized as one of the most important oil transit routes in the world, plays a key role in global energy supply, and the closure of the East-West pipeline could exert further pressure on global oil supply.
Given the importance of this issue, global oil markets will closely monitor developments on this matter. Analysts predict that if this situation continues, global oil prices may be significantly affected and experience greater volatility.
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