Saudi Arabia's critical East-West pipeline, capable of bypassing the Strait of Hormuz, has been shut down, putting over 4 million barrels per day of crude export capacity at risk and forcing more oil shipments toward the strategic waterway. Analysts warn that if the pipeline outage extends beyond the estimated 5-7 day inventory buffer, oil prices could spike dramatically. Global oil inventories have already declined by approximately 1 billion barrels, shrinking the market's cushion against further supply disruptions from Middle East conflict.

Sources familiar with the matter say the Saudi East-West pipeline, which can operate at full capacity of 7 million barrels per day, has been closed following attacks. The global oil market's safety buffer is steadily eroding, and analysts suggest that prices are unlikely to fall below $100 per barrel in the short term. Traders are increasingly pricing in the risk of substantial damage to regional crude supply as Saudi Arabia races to repair the attacked pipeline.

The East-West pipeline transports crude from Abqaiq on Saudi Arabia's Persian Gulf coast to the Red Sea port of Yanbu. Its current closure threatens 4 million barrels per day of oil flows, directly pushing prices higher. For consumers, this is unwelcome news amid heightened US-Iran tensions, military actions by Iran-backed Houthi rebels along the Red Sea, and a series of attacks targeting the world's largest crude exporter.

Where the pressure points lie

Analysts emphasize that Saudi Arabia faces an urgent timeline to repair the pipeline's pumping stations, which appear to have sustained significant damage. The longer the pipeline remains offline, the greater the oil price shock. Janiv Shah, vice president of oil markets at Rystad Energy, noted in a research report: "The broad Middle East conflict has already pushed up the crude risk premium, and the East-West pipeline outage adds another major supply constraint."

"The relatively limited price increase so far suggests the market still expects Saudi Arabia to rely on inventory buffers for short-term exports. But if supply disruptions exceed the 5-7 day inventory buffer window, the situation could shift rapidly," Shah added.

International benchmark Brent crude for November 2026 delivery was trading at $105.80, up 0.12 (0.11%) as of 12:37 PM British Summer Time, with data subject to delay. On Tuesday morning, Brent futures rose 0.6% to $106.29 per barrel, with the contract up more than 21% over the past month. US West Texas Intermediate crude for October delivery also climbed 1.2% to $102.61 per barrel, surging over 25% in the past month, having breached the $100 mark last week for the first time since May of the previous year.

Dwindling crude stockpiles

Saudi Arabia stated it had proactively shut down the East-West pipeline last Friday after multiple drone attacks originating from Iraq. The government reported injuries from the strikes, which targeted key pipeline facilities along the Riyadh-to-Medina segment. Amid ongoing US-Iran standoff, Saudi Arabia has long relied on this pipeline to export oil without passing through the strategic Strait of Hormuz. Following recent expansions, the roughly 750-mile pipeline has a total design capacity of 7 million barrels per day.

Historically, ample global oil reserves have served as a critical buffer during crises, dampening price surges. However, analysts have noted in recent weeks that this safety barrier is rapidly disappearing amid persistent Middle East conflict. Paul Goudon, natural resources director at asset manager 91 Investments, said global oil inventories have already drawn down by about 1 billion barrels.

"We probably have another 1 billion barrels of consumption left before inventories hit bottom—there's still some cushion. But every additional day the Strait of Hormuz is disrupted tightens the oil market further, with significant upside risk to prices," Goudon said via email. "The strengthening vicious cycle is clear."

A worsening spiral

After images of the damaged pipeline emerged, some observers believe repairs could take a considerable time. Andy Lippow, president of Lippow Oil Consultants, estimates restoration might take months. Saudi authorities have not yet disclosed the number of damaged pumping stations or a restart timeline.

Torbjorn Soltvedt, chief Middle East analyst at risk intelligence firm Verisk Maplecroft, said the pipeline damage and delayed repairs highlight an intensifying vicious cycle driven by regional conflict. "Attacks on energy infrastructure and tankers restrict crude exports; overall maritime disruptions further delay imports of repair parts, and this pipeline is the only major transport route bypassing the Strait of Hormuz," he wrote in a research note.

Soltvedt explained that the East-West pipeline closure means more than 4 million barrels per day of exports must be redirected through the Strait of Hormuz, where daily transit volumes have been volatile, typically running at only half of pre-conflict levels.

Laura James, deputy director of Oxford Analytica and senior Middle East analyst, noted that following the last attack on this pipeline, Saudi Arabia managed to restart operations within days, but the current damage appears "far more severe." Speaking on the program "Inside the Middle East" on Monday, she said: "Even if the pipeline is restarted, risks remain in the Bab el-Mandeb Strait, and whether crude can be shipped out smoothly is still questionable."

James believes that with Iran exerting pressure to block oil exports from the region, the entire Red Sea shipping route is "increasingly likely to come under threat." She added: "Notably, Gulf states are indeed stepping up coordinated action, recognizing this as a challenge that must be addressed. The postponement of the Oman-Iran meeting originally scheduled for Monday also suggests more careful preparatory measures are underway in the Gulf region."