Global oil supplies arealready under pressure due to the dual blockade of the Strait of Hormuz and the Red Sea. Damage to Saudi Arabia's East-West Pipeline has further exacerbated the situation.

Global oil supply in crisis

Saudi Arabia is the world's largest oil supplier, and all the routes it uses to ship oil to the world are currently under pressure. The ongoing war between the US and Iran has caused significant disruption in the Strait of Hormuz.

Meanwhile, Yemen's Houthi rebels have strengthened their hold on Bab al-Mandeb in the Red Sea. Iranian drone attacks have now shut down the country's east-west oil pipeline, the East-West Pipeline. This pipeline is considered Saudi Arabia's main line of defense.

How will oil be supplied now?

When shipping through the Strait of Hormuz became difficult, Saudi Arabia relied on this pipeline to maintain its crude oil supply. Before the war between the US and Iran, the 200-kilometer-long East-West Pipeline carried approximately 4 to 5 million barrels of crude oil daily.

According to a Reuters report, supply through this channel fell slightly to around 2 million barrels in August. Now the biggest question is: with all oil export routes from Saudi Arabia being closed, is the world heading towards a major crisis? Will crude oil supplies stop?

Saudi Arabia faces double crisis

Saudi Arabia's crude oil primarily comes from the country's east, and can be loaded onto tankers in the Persian Gulf and exported via the Strait of Hormuz. However, due to the current conflict, Saudi Arabia has relied on the East-West Pipeline, also known as Petroline, for its oil supplies. This pipeline transports crude oil from the east to Yanbu on the Red Sea, a distance of approximately 1,200 kilometers.

Is there any other way left?

Saudi Arabia still has another option: it can transport crude oil from the Red Sea to the Mediterranean port of Alexandria (Sidi Kerir) via Egypt's Suez Canal or the SUMED pipeline. However, this route has emerged as the only safe, but extremely expensive, option for Asian countries like India, China, and Japan.  

Oil that previously traveled to Europe via the Red Sea and the Suez Canal, or directly from the Gulf via the Arabian Sea to India and China, now has to circumnavigate the entire African continent (Cape of Good Hope). This route takes an additional 14 to 22 days. This has multiplied the cost of fuel and freight, contributing to the price of Brent crude exceeding $108 per barrel.