Drone Strikes Disable Saudi Oil Pipeline, Crude Prices Surge

Drone strikes originating from Iraqi territory targeted Saudi Arabia’s East-West Crude Oil Pipeline on September 10-11, resulting in significant damage and the pipeline being taken offline for repairs. This incident has led to a sharp increase in crude oil prices, with Brent crude exceeding $108 per barrel.

The Petroline, which spans 1,200 kilometers, is crucial for transporting oil from the eastern fields of Saudi Arabia to the Red Sea export terminal at Yanbu. The pipeline typically handles around 4 million barrels per day, but complete repairs are estimated to take five to six weeks, with a partial restart potentially occurring sooner.

The strikes caused extensive fires and injuries at pumping stations in the Riyadh and Medina regions, with satellite imagery revealing severe structural damage and oil spills in the surrounding desert. Saudi authorities shut down the pipeline as a precautionary measure, which is critical as current crude stocks at the Yanbu port can only sustain export commitments for approximately five to seven days.

This marks the second attack on Petroline in 2026, following a previous drone strike in April that reduced flows by about 700,000 barrels per day. The ongoing conflict in the region, particularly involving Iran-linked groups, has raised concerns about the security of Saudi energy infrastructure.

As a result of the pipeline shutdown, European natural gas prices surged by approximately 6% at the market open, with the front-month Dutch TTF futures reaching around €80 per megawatt-hour. This increase reflects broader fears of energy supply disruptions amid escalating tensions in the Middle East.

The International Energy Agency has urged emergency measures to manage the situation, as rising energy prices could complicate economic recovery efforts in Europe, particularly in light of already low gas inventories heading into winter.