Saudi Arabia faces running out of oil stocks for export within days if a drone-damaged major pipeline to the Red Sea is not restarted, according to Saudi oil buyers and traders. This could result in the loss of up to 4% of global oil supply.
Satellite photos released on Sunday night appeared to show a pumping station on the 1,200km Saudi east-west pipeline charred and badly damaged following drone attacks on Friday. The pipeline has been vital for rerouting approximately 4 million barrels per day, equivalent to about 4% of global supply, to the port of Yanbu on the Red Sea.
With the pipeline currently out of service, Yanbu has sufficient stocks to maintain exports for only five to seven days, according to three industry sources familiar with Saudi exports. Other stocks from Egyptian ports could supply customers for several days, but these are not full and will eventually deplete without the east-west pipeline resuming operations, four sources stated.
The disruption has already impacted global oil prices, with Brent crude rising more than 3.4% to $108 per barrel on Sunday, a level not seen since May. A further decline in oil flow from Saudi Arabia, the world's largest oil exporter, is expected to worsen the global supply crunch, which has already pushed global fuel prices to record highs and spurred inflation worldwide.
Riyadh has not yet provided full details on the extent of the damage or how long the pipeline will remain offline. Estimates for repairs vary, with one source suggesting up to six weeks, while another indicated it could be fixed sooner and partially resume pumping during repairs.