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Saudi Oil Pipeline Attack: How the Shutdown Could Hit Global Economy

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Saudi Arabia’s temporary shutdown of its major East-West oil pipeline after a drone attack could trigger fresh pressure on the global economy, with countries across Asia, Europe, Africa and North America facing the possibility of higher oil, fuel and transportation costs.

The 1,200km pipeline, operated by Saudi Aramco, connects Saudi Arabia’s oil-producing east to the Red Sea port of Yanbu.

It provides the kingdom with a crucial alternative to the Strait of Hormuz, which has already been heavily disrupted amid the ongoing conflict involving Iran.

SEE MORE: OPEC+ Snubs Nigeria, Raises Output Quota for Saudi Arabia, Others

Saudi Arabia said drones struck the pipeline in the Riyadh and Medina areas on September 10, causing injuries and damage.

The kingdom subsequently suspended operations as a precaution while specialised teams assess and secure the facility.

Saudi authorities later confirmed that the drones were launched from Iraqi territory.

According to report, the pipeline had been carrying around 4 million to 5 million barrels of oil per day, equivalent to roughly 4 to 5 percent of global oil supply.

Countries likely to feel the impact

China and India

China, the world’s largest crude oil importer, could be among the biggest casualties if the disruption lasts. Reduced Saudi supplies could force Chinese refiners to compete for alternative crude, increasing energy and manufacturing costs.

India is also highly exposed because of its dependence on imported crude. Higher oil prices could raise petrol, diesel and aviation costs while increasing inflation and the country’s import bill.

Japan and South Korea

Both countries depend heavily on imported energy. A prolonged supply disruption could increase the cost of crude, manufacturing, transportation and petrochemical production.

United States and Europe

The United States is a major oil producer but remains exposed to global prices. A sustained supply shortage could push up gasoline and diesel prices and increase transportation costs.

European economies, including Germany, France, Italy, Spain and the United Kingdom, could also face higher fuel, manufacturing and shipping costs.

Africa

The impact could spread across Africa through higher fuel and transportation prices.

Nigeria could benefit from higher crude prices through increased oil revenues, but higher international energy and shipping costs could also create pressure on consumers and businesses.

Oil-importing countries such as South Africa, Kenya, Tanzania and Ethiopia could face greater pressure from rising energy costs.

Pakistan and Southeast Asia

Pakistan, Bangladesh, Indonesia, the Philippines, Thailand and Vietnam could also be affected because of their reliance on imported energy.

Higher crude prices could increase transportation, electricity, manufacturing and food-distribution costs.

Iraq investigates the attack

Iraq has condemned the attack and said it would not allow its territory to be used as a “launchpad for attacks against any nation.”

Prime Minister Ali al-Zaidi ordered an investigation after authorities determined that the drones originated from Maysan province, which borders Iran.

The commander of the Maysan operations command was dismissed, while Iraq also ordered the closure of the Shalamcheh border crossing with Iran as a precaution.

No group has claimed responsibility.

Analysts have pointed toward Iran-backed armed groups in Iraq as a possible culprit, while US President Donald Trump has also blamed Iran. Those claims have not been independently established.

Saudi Arabia holds off on retaliation
Riyadh has so far decided not to retaliate, saying it would refrain “at this stage” following a request from the Iraqi prime minister.

Saudi Arabia, however, warned that it reserves the right to take “all necessary measures” to protect its sovereignty, security and infrastructure.

Yemen adds to the danger

The attack comes as Iran-backed Houthi forces make major advances along Yemen’s Red Sea coast and have reportedly seized the strategic Mayun Island near the Bab al-Mandab Strait.

That development is significant because Bab al-Mandab is one of the world’s major shipping chokepoints.

Saudi Arabia is therefore facing pressure on both sides of the Arabian Peninsula: its traditional export route through the Strait of Hormuz is disrupted, while its key alternative pipeline to the Red Sea has now been attacked.

What happens next?

Saudi Arabia could attempt to reroute some crude through Egypt, the Suez Canal and the Sumed pipeline, but these alternatives cannot immediately replace the East-West pipeline.

The kingdom could also face longer and more expensive shipping routes around Africa if Red Sea security deteriorates further.

Brent crude has already risen above $100 per barrel, while US diesel prices have reached record levels.

Ben Cahill of the Atlantic Council described the East-West pipeline as Saudi Arabia’s “principal bypass option to avoid the Strait of Hormuz.”

“The key buffers that got us through the last six months have basically been worn away,” he said.

Saudi political analyst Khalid Bartafi warned that the consequences could become global.

“This is not just our problem, it’s a global problem,” he said.

 

International News

BRICS Breaks Silence on U.S.-Iran Strikes, Demands ‘Maximum Restraint’

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BRICS leaders have called for “maximum restraint” and urged an end to further escalation in the Middle East as the United States and Iran resume tit-for-tat strikes.

The call was contained in a joint declaration unanimously adopted on Saturday, September 12, during the first day of the BRICS leaders’ annual summit in New Delhi, India.

RELATED NEWS: Trump Imposes 10% Tariff On BRICS, Partner Countries

In the declaration, the bloc said it had “deep concern over the continued escalation of tensions in Middle East” and called on all sides to exercise “maximum restraint” while avoiding actions that could further aggravate the situation.

The statement comes after a pause in fighting for much of August, with the United States and Iran now engaged in renewed exchanges of strikes.

BRICS’ position carries particular significance because the expanded bloc includes Iran, which is directly involved in the conflict, alongside the United Arab Emirates, a close U.S. ally.

The presence of both countries had made consensus on a joint statement more challenging, but the members ultimately agreed on a common position.

BRICS Pushes Dialogue, Diplomacy
The New Delhi Declaration also reaffirmed the bloc’s commitment to resolving international disputes peacefully.

BRICS members said they supported the resolution of international disputes “through dialogue, consultation, and diplomacy.”

The statement did not stop at the Middle East conflict, as the bloc also expressed concern over the increasing use of

“unilateral tariff and non-tariff measures,” arguing that such measures can distort international trade.

The concerns come amid U.S. sanctions against Iran and sanctions imposed on Russia over its war with Ukraine.

The BRICS bloc currently comprises Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.

The joint declaration represents an attempt by the increasingly influential grouping to maintain a united position on major international security issues despite differences among its members.

 

 

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International News

Iran Strikes US Base, Targets 20 Vessels as Hormuz Crisis Deepens

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Iran and the United States have exchanged fresh attacks in the Middle East, deepening their six-month-old conflict and raising fears of a wider disruption to global oil supplies.

Iran’s Islamic Revolutionary Guard Corps said on Wednesday that it had attacked 20 US vessels attempting to pass through the strategic Strait of Hormuz, a vital waterway that normally carries around a fifth of the world’s oil and liquefied natural gas.

The latest escalation came after US forces destroyed five Iranian oil tankers on Tuesday.

SEE ALSO: Crude Races Towards $100 as US Steps Hard on Iran

The US military said the strikes followed an Iranian attack on an American warship, the second reported attack on a US naval vessel in less than a week.

In retaliation, Iran’s Revolutionary Guards said they had launched missiles at the US Al-Azraq air base in Jordan.

Iranian state media reported that the attack damaged maintenance and repair facilities, deployment locations and shelters used for fighter jets.

Jordan’s army, however, said it intercepted 18 missiles launched from Iran towards the kingdom.

The latest confrontation has further intensified the standoff over the Strait of Hormuz, which Iran has largely controlled since the war began in February.

Traffic through the waterway has been virtually paralysed, with Tehran requiring vessels to obtain permission and pay transit fees before passing through the strait.

Iran threatens Gulf tankers

Iran has also threatened to target oil tankers operating near US allies Kuwait and Bahrain in retaliation for the American strikes on its vessels.

The Revolutionary Guards warned crews aboard oil tankers in the area to leave their ships, saying they “will be targeted.”

The warning has heightened concerns over the safety of commercial shipping and the possibility of further disruptions to energy supplies from the oil-rich Middle East.

Oil prices rose sharply amid the latest escalation, with Brent crude climbing to $99.46 per barrel in Asian morning trade.

West Texas Intermediate, the main US crude benchmark, also rose to $94.45 per barrel.

Rubio issues warning

US Secretary of State Marco Rubio warned that Iran would face further consequences if it continued attacking American naval vessels.

“Iran continues to try to hit US naval ships, and for every time they do that or try to do that, they’re going to lose tankers, and I think you’ll see that again today,” Rubio told reporters on Tuesday during a visit to Colombia.

Iranian media also reported that a US missile struck a tanker off the coast of Kharg Island, although no casualties were reported.

Iran’s Army Chief of Staff, Ali Abdollahi, had earlier warned that Tehran would strike US bases across the region if Iranian oil tankers were attacked.

Iran claims US drone seizure

The Revolutionary Guards also claimed on Tuesday that they had seized an American submarine drone in the Strait of Hormuz, describing it as “one of the most modern, unmanned” US vessels.

The US military disputed the claim, saying the drone had malfunctioned and was an older model that did not contain sensitive information.

Iranian state television separately reported that the Guards had attacked two US destroyers with ballistic missiles, although the US military had not immediately commented on the claim.

As the confrontation continues, concerns are mounting that prolonged fighting around the Strait of Hormuz could further restrict the movement of oil and gas and push global energy prices higher.

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International News

Tanzania in Mourning as President Samia Loses Husband

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Tanzania is mourning following the death of Hafidh Ameir Hassan, husband of President Samia Suluhu Hassan, who died on Monday while receiving treatment at a hospital in Zanzibar.

The death of Tanzania’s First Gentleman was officially announced by Vice-President Deogratius Ndejembi, according to the BBC.

Ndejembi said Ameir had been suffering from a heart condition and died at about 8am local time at the Emilio Mzena Memorial Hospital in Zanzibar.

SEE ALSO: Tanzania Eyes Expanded Dangote Investments in Fertiliser, Energy, Infrastructure

He added that funeral arrangements were underway in Kizimkazi, a village on Zanzibar.

Ameir, an agricultural academic, largely kept a low public profile and rarely appeared alongside his wife at official events.

He became Tanzania’s first First Gentleman after Samia assumed the presidency in March 2021.

The couple married in 1978, before Samia entered national politics, and had four children — three sons and a daughter.
Their daughter, Wanu Hafidh Ameir, is a politician and serves in Zanzibar’s House of Representatives.

Ruto, AU mourn First Gentleman
Kenyan President William Ruto expressed his condolences to President Samia and her family following the death.

In a message posted on X on Monday, Ruto said, “I have received with deep sorrow the news of the passing of Hafidh Ameir Hassan, husband of Her Excellency Dr Samia Suluhu Hassan, President of the United Republic of Tanzania.”

He added, “President Samia has lost a lifelong companion, her children a beloved father, and Tanzania a distinguished son.”

Ruto further said, “Kenya stands with our Tanzanian brothers and sisters in this moment of grief,” while praying for the bereaved family.

The African Union Commission Chairperson, Mahmoud Ali Youssouf, also extended his condolences to President Samia, her family and the people of Tanzania.

In a statement issued on Monday, Youssouf said the AU conveyed its “deepest condolences” over the passing of Hafidh Ameir Hassan and wished the bereaved family “strength, courage and solace.”

The AU Chairperson also prayed for the peaceful repose of the deceased, concluding, “Inalilahi wainailehi rajiun.”

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