Oil nears monthly highs after attack shuts Saudi East-West pipeline

The pipeline, which normally carries oil around the Strait of Hormuz, was shut as a precaution after an attack in Saudi Arabia.

Oil prices are close to their highest levels of the month after Saudi Arabia shut down its East-West pipeline following an attack.

Saudi Arabia's Ministry of Energy confirmed on 11 September that the pipeline had been attacked in the Riyadh and Madinah regions on the morning of 10 September, according to the Payne Institute for Public Policy, which cited the ministry. The pipeline was shut down as a precaution.

The East-West pipeline normally carries roughly 4 to 5 million barrels of oil a day from Saudi Arabia's eastern fields to the Red Sea port of Yanbu, according to Al Jazeera. That route lets crude bypass the Strait of Hormuz, which has been largely closed since a US-Israel war on Iran began in February. Saudi Aramco chief executive Amin Nasser said in August that the pipeline had done more to mitigate the disruption from that war than the release of emergency crude reserves, CNBC reported.

Gulf producers have continued to move crude out of the region despite months of tension, and flows have recovered to around 40% of prewar levels over the past six months. That pattern points to a market that has already priced in ongoing friction along Gulf export routes, which makes the shutdown of a single pipeline a test of how much spare capacity to reroute crude actually exists, rather than a sign that supply itself is running short.