Saudi Oil Pipeline Shutdown, Houthi Gains Push Red Sea Crisis Deeper

Saudi Arabia's East-West Pipeline is expected to remain largely shut for several weeks following an attack, while Houthi forces have expanded their control over strategic islands along the Red Sea. The developments have added pressure on Saudi Arabia's oil export routes, pushed crude prices higher and intensified fighting in Yemen.

The 1,200-kilometre pipeline transports crude from Gulf ports to Yanbu on the Red Sea, where oil is loaded onto tankers. It was shut following Thursday's attack, which Saudi Arabia attributed to drones launched by Iran-backed militias in Iraq. Regional officials said repairs at a major pumping facility could take three to five weeks, although partial operations may continue during the work.

Rystad Energy estimated that the pipeline had been transporting between 2.6 million and 4 million barrels of oil per day since late August. A complete shutdown would therefore remove a significant volume from the market. Brent crude climbed above USD 109 as concerns about supply disruptions increased.

The situation has become more complicated after Houthi forces reportedly captured the Greater and Lesser Hanish islands. Located about 160 kilometres north of the Bab el-Mandeb Strait, the islands overlook an important maritime route connecting the Red Sea with the open ocean and Saudi Arabia's Asian markets.

The Houthis had already captured the port city of Mokha and Mayun island near the Bab el-Mandeb. Saudi-backed forces have attempted to regroup, while Saudi Arabia has carried out strikes against Houthi positions in Mokha, Dhubab and other areas of Taiz province.

The Houthis have also claimed missile and drone attacks targeting Saudi Arabia's King Khalid Air Base. Saudi authorities said the attacks affected civilian areas, injuring 13 people and damaging homes and vehicles.

The disruptions have further complicated Saudi oil exports. The International Energy Agency said Saudi production fell to about 6 million barrels per day in August from nearly 10 million barrels per day in September the previous year because of the Iran war.

The conflict is also worsening Yemen's humanitarian situation. The World Health Organisation reported more than 500 deaths in Yemen over the past week, while nearly 94,000 people have been displaced. The escalation threatens to push the country closer to a broader civil war after a truce that had largely held since 2022.