The Saudi Ministry of Energy announced that the East-West oil pipeline was temporarily closed as a precaution after multiple attacks in the Riyadh and Medina regions on the morning of the 10th, resulting in injuries that required treatment. The Ministry of Foreign Affairs indicated that the drones originated from within Iraq, causing a fire at the pump station; the pipeline is designed to transport approximately 7 million barrels per day.

This pipeline transports crude oil from eastern oil fields to the Red Sea port of Yanbu to bypass the Strait of Hormuz. Following the outbreak of the US-Iran conflict, Saudi Arabia rerouted about 5 million barrels per day through this pipeline. The Ministry of Foreign Affairs stated that, at the request of the Iraqi Prime Minister, there will be no retaliation at this stage, while reserving the right to take necessary measures. The Iraqi armed forces condemned the attacks and stated that the Prime Minister has ordered an investigation. Oil prices briefly surpassed $100 per barrel on Monday.

The UK Maritime Trade Operations Center reported that a vessel's captain observed four unidentified projectiles hitting two ships about 4 nautical miles west of Hasab, Oman, one of which caught fire, while the condition of the other remains unknown; an investigation is underway. Preliminary data from Kpler indicated that seven vessels passed through the Strait of Hormuz on Thursday, down from 11 the previous day and an average of 15 over the past 10 days; prior to the conflict, approximately 125 large commercial vessels passed through this waterway daily, carrying about 20% of the world's daily supply of crude oil and liquefied natural gas. The statistics do not include vessels with closed identification systems. Qatar's energy-related vessels have seen a rare occurrence of liquefied natural gas shipments this week.

Buyers are those seeking to bypass Gulf exports of crude oil and bulk carriers and refined oil tankers still testing the strait; sellers are Saudi Arabia, which has closed the pipeline, and the insurance and escort systems tightening navigation routes. The driving factors are the attacks on facilities and the reduced traffic in the strait to single digits. Capital is shifting from spot premiums into freight, war risk, and alternative oil sources. Beneficiaries are sellers who can still extract oil from the Red Sea or other production areas; those under pressure are refineries and shipowners reliant on Gulf exports and passage through Hormuz.

Source: Public Information