Oil Shock: Saudi Pipeline Hit, Strait of Hormuz Under Fire; Brent Near $108

Saudi Arabia’s East-West crude oil pipeline remained shut on September 14 after multiple attacks on September 10 caused injuries and damage in the Riyadh and Madinah regions, adding another disruption to Middle East oil flows as shipping through the Strait of Hormuz remains constrained.

Saudi Arabia’s Ministry of Energy said it had shut the pipeline as a precaution, while emergency and technical teams assessed its safety.

The 1,200-kilometer pipeline connects Saudi Arabia’s oil-producing areas in the east with the Red Sea port of Yanbu. Saudi Aramco has historically described the pipeline as having a capacity of up to 7 million barrels per day, following an expansion from 5 million barrels per day.

Saudi Arabia’s Ministry of Foreign Affairs said Riyadh would not immediately retaliate, following a request from Iraq’s prime minister that Baghdad be given time to take measures against attacks launched from Iraqi territory. It said the pipeline was targeted “by several drones launched from Iraq, resulting in injuries and some damage that is currently being addressed.”

Pipeline Closure Removes Key Bypass Route

The East-West pipeline has grown because it offers a land route to transport Saudi crude oil to the Red Sea rather than through the Strait of Hormuz.

The US Energy Information Administration stated that the East-West pipeline of Saudi Arabia and the Abu Dhabi pipeline of the United Arab Emirates have a combined capacity of about 4.7 million barrels per day, which can go around the Strait of Hormuz.

The shutdown at the present time eliminates a major alternative route since oil traffic through the strait is already heavily disrupted. According to EIA data, the amount of oil passing through the Strait of Hormuz averaged 4.9 million barrels per day in the second quarter of 2026, a decrease from 21.6 million barrels per day in the fourth quarter of 2025.

The extent of the disruption is significant since the Strait of Hormuz has historically accounted for about one-fifth of global consumption of petroleum liquids. The EIA estimated that 20.9 million barrels per day of oil passed through the waterway in the first six months of 2025.

The Saudi Arabia Ministry of Energy stated that the pipeline had been halted as a precautionary measure and that emergency teams had been sent to secure the facility and examine its condition. The ministry also failed to provide a schedule for restarting the pipeline.

Riyadh Holds Off on Retaliation

Saudi Arabia said it would hold off on retaliation following a request from Baghdad, giving “the brotherly Iraqi government the opportunity to take the necessary measures to prevent attacks launched from Iraqi territory against Saudi Arabia and neighboring countries.”

Iraq has said the attacks originated from its territory and launched an investigation. The developments have increased pressure on Baghdad as it attempts to prevent its territory from being used for attacks against neighboring states.

Saudi Arabia’s Foreign Ministry said Riyadh reserves the right to take measures needed to protect its sovereignty, security, infrastructure, citizens and residents.

Oil Prices Rise as Hormuz Faces Further Disruption

Brent crude rose more than 3% on Sept. 14, reaching around $107.81 a barrel in morning trading, while U.S. crude rose about 2.9% to $102.94.

The move followed a week in which Brent gained more than 8%, with prices remaining above $100 a barrel amid disruptions affecting Middle East oil production and transportation. Brent had settled at $104.61 a barrel on Sept. 11, while West Texas Intermediate settled at $100.05.

Traders and buyers were concerned that inventories at Yanbu could support current export levels for only several days if the pipeline is not restarted. Saudi government timetable for a full restart hasn’t announced yet.

Hormuz Incident Adds to Shipping Risk

The pipeline shutdown came as shipping risks increased in the Strait of Hormuz.

The United Kingdom Maritime Trade Operations said a vessel was struck by an unidentified projectile while transiting the strait. The crew’s condition, the extent of damage and any environmental impact were initially unknown.

The incident adds to an already significant decline in maritime traffic through the waterway. Only four outbound and 10 inbound vessels were recorded over the weekend, compared with a 10-day average of 14 daily transits, although some vessels may have gone undetected because their transponders were inactive.

Iran-Gulf Meeting Postponed

Diplomatic efforts to address the shipping crisis also faced a setback.

The meeting between Iran and the Gulf states, which was arranged for September 15 in Oman, has been postponed. Badr Albusaidi, Oman’s Foreign Minister, stated that the meeting was delayed ‘in the interests of consensus’ without giving a new date.

The delay in the decision came about because the regional governments were coming under increasing pressure to get safe maritime traffic reestablished in the Hormuz area, one of the world’s most important routes for the transit of oil.

EIA Sees Elevated Oil Prices Through 2026

The Energy Information Administration of the United States anticipates that global oil stocks will keep on falling throughout the end of 2026 due to the ongoing disruptions in the production and trading of crude oil.

The EIA estimated that global inventories decreased by an average of 3.9 million barrels each day during the second quarter and anticipates further average reductions of 3 million barrels per day in the third quarter and 1.7 million barrels per day in the fourth quarter; it also expects Brent crude to average about $90 a barrel in the second half of 2026, which is $8 higher than its earlier forecast.

The forecast made by the agency relies on the idea that oil producers and traders will be able to slowly reestablish the disrupted flows by using other routes. If there are prolonged outages impacting the East-West pipeline in Saudi Arabia or additional disruption in the Strait of Hormuz, then this scenario could become more complicated.

Oil markets are concentrating on how fast the alternative supply routes and the Saudi export facilities can get back to normal because of the Saudi pipeline being shut, the restricted traffic at Hormuz and a new maritime incident.