Iran attacks on crucial Saudi pipeline and production facilities slash kingdom’s oil output
Saudi Arabia’s critical pipeline to the Red Sea was recently attacked by Iran, reducing production by 700,000 barrels per day.
The attack targeted a pump station on the East-West pipeline. state news agency report. This pipeline carries crude oil from processing facilities near the Persian Gulf to an export terminal called Yanbu on the Red Sea.
The Saudis relied on the 7 million barrel-per-day pipeline as their main way to export crude oil during the Iran war. Riyadh cannot export through the Strait of Hormuz due to Iranian attacks.
Attacks on Saudi Manifa and Khurais production facilities reduced the kingdom’s production by 600,000 barrels per day, according to a Saudi Press Agency report. Various refineries were also attacked.
The damage to Saudi energy infrastructure will compound the massive disruption to global oil supplies triggered by Iran’s attacks on tankers in the Strait of Hormuz.
The United States agreed to a two-week ceasefire on Tuesday in exchange for Iran allowing ships to pass through the strait. But the strait remains effectively closed to traffic, the CEO of the United Arab Emirates’ state-owned oil company said on Thursday.
Sultan Ahmed Al Jaber, CEO of Abu Dhabi National Oil Co., said Iran has made it clear that ships must obtain permission to pass through the strait.
“This moment requires clarity,” Al Jaber said. social media post. “So let’s be clear: The Strait of Hormuz is not open. Access is restricted, conditioned and controlled.”
The Bosphorus connects Gulf oil producers such as Saudi Arabia and the UAE to global markets. Before the US and Israel attacked Iran on February 28, about 20 percent of global oil supplies passed through the waterway.
Gulf oil producers have halted production of about 13 million barrels per day due to the disruption in the strait, oil analyst Matt Smith of Kpler said in an interview with CNBC on Thursday.
