Saudi Arabia could run out of oil reserves available for export within days unless a major pipeline to the Red Sea resumes operations after being damaged in a drone attack originating from Iraq, according to the WSJ.
Satellite images released on Sunday night appear to show a pumping station on Saudi Arabia’s critical 1,200-kilometre East-West pipeline burned and severely damaged following the drone attacks on Friday, September 11.
A further decline in oil flows from Saudi Arabia, the world’s largest oil exporter, would worsen the global supply shortage, which has already pushed fuel prices to record highs and increased inflation worldwide.
Saudi Arabia transports oil equivalent to 4% of global supply through the pipeline, while oil prices reached $108 a barrel yesterday.
The development comes as Houthi forces in Yemen have taken control of the strategically important Perim Island in the Bab el-Mandeb Strait, expanding their control over the narrow shipping route.
The Houthi advance and significant damage to the East-West pipeline could push oil prices towards $120 a barrel. Saudi Arabia transports oil equivalent to 4% of global supply through the pipeline, while oil prices reached $108 a barrel yesterday.
Source: Wall Street Journal
