Saudi Arabia could face a shortage of oil available for export if its main pipeline to the Red Sea is not restored within the next few days.
The warning comes from short-term oil market traders and investors, who estimate that the disruption could remove more than 4% of global supply from the market.
A further decline in Saudi exports would deepen the global oil supply crisis at a time when international prices are already at record levels. The situation is adding to inflationary pressures across major economies and has also contributed to rising U.S. bond yields, which have climbed to levels comparable to those seen during the 2008 financial crisis.
Saudi Arabia’s strategic East-West pipeline was shut down on September 11 after drone attacks struck the country’s energy infrastructure.
Since then, authorities in Riyadh have released few details about the extent of the damage or how long it could take to fully restore operations.
Investors are closely monitoring the situation, as any prolonged shutdown could significantly limit Saudi Arabia’s ability to supply international markets and place further upward pressure on oil prices.
If the pipeline does not return to operation soon, the global market could face another major supply shock, with direct consequences for fuel prices, inflation and the wider global economy.
