Saudi Oil Exports Disrupted After Drone Attack on East-West Pipeline

On the morning of 10 September 2026, a wave of drone strikes hit pumping stations along Saudi Arabia's East-West Crude Oil Pipeline in the Riyadh and Medina regions, triggering large fires and injuring several people. The following day, the Saudi Ministry of Energy confirmed that the 1,200-kilometer line, also known as Petroline, had been shut down as a precautionary measure while teams assessed the damage. Satellite images taken after the attack showed extensive fire damage at a pumping station near Al Mesba'ah, southeast of Medina.

The pipeline carries crude from the kingdom's eastern oil fields to the Red Sea port of Yanbu. It became Saudi Arabia's main export lifeline after the US-Israeli war on Iran began on 28 February 2026 and traffic through the Strait of Hormuz came to a near standstill. The line has a maximum capacity of 7 million barrels per day, including about 2 million barrels per day that feed domestic refineries, and it was moving roughly 4 to 5 million barrels per day before the strikes, equivalent to 4% to 5% of global oil supply. Because tankers loading at Yanbu for Europe sail north through the Suez Canal or unload into the SUMED pipeline in Egypt, the route had become the main supply channel for Mediterranean and northwest European refiners buying Saudi crude.

Saudi Arabia attributed the strikes to drones operated by Iran-backed militias in Iraq. The Iraqi government confirmed that the attacks had been launched from its territory, dismissed the military commander of Maysan province and closed two border crossings with Iran, while an umbrella group of Iraqi militias denied any involvement. Some early market analyses, including one published by Kpler, blamed Yemen's Houthis, who declared a maritime blockade on Saudi shipping in July and have since seized strategic positions near the Bab el-Mandeb Strait. Riyadh said it would not retaliate for now following a request from Iraq's prime minister, but reserved the right to protect its critical facilities.

This is not the first time the pipeline has been targeted during the war. In April 2026, a strike on one of its 11 pumping stations cut throughput capacity by around 700,000 barrels per day before quick repairs restored flows within days. According to Kpler, the September damage is far more serious because several pumping stations were disabled, even though the pipe itself appears to have remained largely intact.

The impact on exports was immediate. No crude cargo has left Yanbu since 11 September according to tanker tracking data, and on 15 September shipping sources confirmed that loadings at the terminal had been suspended. Analysts estimated that storage tanks at Yanbu held only around 15 million barrels, enough for a few days of loadings. Saudi Aramco then informed at least three European refiners that late-September cargoes would be cancelled or delayed, with some deliveries pushed back as far as November. Poland's Orlen, one of the largest European buyers of Saudi crude, launched spot tenders and bought North Sea grades such as Johan Sverdrup, Grane and Johan Castberg, while also seeking US, Kazakh, Algerian and Guyanese barrels. The company says its refineries are not facing any immediate feedstock disruption.

Oil prices reacted sharply. Brent futures settled at $108.75 a barrel on 15 September, their highest close since 19 May, while physical Dated Brent traded near $122 a barrel. Medium and heavy North Sea grades such as Johan Sverdrup reportedly traded at premiums of up to $20 a barrel over the Dated benchmark as European refiners rushed to replace medium-density Saudi barrels. In Asia, Shanghai crude futures climbed to a record of $138 a barrel as Chinese refiners competed for October supply. European diesel prices are hovering near record highs, and Kpler estimates that the loss of output from the Yasref refinery in Yanbu removes around 200,000 barrels per day of diesel from a market already short of middle distillates.

To limit the damage, Riyadh is redirecting part of its exports back through the Strait of Hormuz. Saudi Arabia is offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman's Sohar port, just outside the strait, and crude volumes crossing Hormuz rose above 2 million barrels per day during the first half of September. Kpler reports that incremental Saudi barrels from Gulf terminals are being sold to buyers in China and South Korea, and that Saudi crude production has fallen below 6 million barrels per day, a multi-decade low, as the kingdom gives priority to supplying its own refineries.

This shift is placing heavy pressure on tanker markets. Chartering a VLCC from the Persian Gulf to Asia now costs around $30 to $32 per barrel before war risk premiums and extra insurance, compared with roughly $20 per barrel for loadings in the Gulf of Oman. Kpler says the main bottleneck is not the number of available supertankers but the ship-to-ship transfer capacity at Fujairah and Sohar, which is believed to be running at or near its limit. If shuttle demand keeps growing, more cargoes could sail directly from the Gulf to Asia or be transferred at less efficient locations off western India or Malaysia. Most vessels currently crossing Hormuz do so with US naval support. The consultancy expects tanker rates to stay high through the rest of 2026 and into 2027, even if Yanbu volumes recover.

Saudi Aramco is building a bypass around the damaged sections of the pipeline. A person familiar with the matter said the company aims to restore about half of the line's capacity within days and full capacity in about six weeks, while regional officials quoted in the press put the repair period at three to five weeks. Kpler is more cautious and gives roughly even odds to a scenario in which 2 to 2.5 million barrels per day of Yanbu exports resume within about a month, with a risk that new attacks on the bypass could extend the outage over several months. US Energy Secretary Chris Wright described the shutdown as a brief and temporary interruption. As of 17 September, Saudi authorities have not announced an official restart date and loadings at Yanbu remain suspended.

Markets have calmed slightly since mid-week. Brent fell 3.6% to around $102 a barrel on 17 September as reports of Saudi cargoes routed via Oman eased fears of a prolonged supply gap, although prices are still more than 12% higher than at the start of September. Rystad Energy estimates that a month-long outage could keep up to 120 million barrels of Saudi crude off the market, while Kpler calculates that the global oil market is running a deficit of only 1 to 2 million barrels per day. The International Energy Agency's September report already forecast a 5.7 million barrels per day decline in global oil supply in 2026 because of the war.

The outage also adds to wider stress across energy markets. European gas prices have risen by about 50% since early August, Asian spot LNG trades near $27 to $28 per million British thermal units, and South Korea and China remain far more exposed than Japan to the ongoing loss of Qatari LNG shipments through Hormuz. These moves are driven mainly by the Hormuz crisis rather than by the pipeline outage itself, but they raise the cost of any further supply shock for European and Asian importers.

European refiners and diesel buyers are the most exposed in the short term, while Asian buyers are relying on costlier shuttle cargoes loaded around Hormuz and off Oman.