by Mish Shedlock, Mish Talk:
Four million barrels per day are now offline, likely for months, not weeks.
The Expert Assessment
Politico reports Saudi pipeline hit by drones will be out of service for weeks, further restricting oil flow
A crucial Saudi oil pipeline that was struck in an attack will be mostly out of service for weeks as the damage is repaired, two regional officials said Monday, as Yemen’s Houthi rebels seized more islands along Red Sea shipping routes in a new blow to Saudi Arabia’s oil exports.
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Oil prices gained more than 2% amid growing worries about global petroleum supplies and the effect of the new developments on the ability of the world’s biggest exporter to get its crude to market. The Iran war has forced the kingdom to shift its exports away from the Persian Gulf, since Iranian attacks have stifled shipping through the gulf’s sole exit, the Strait of Hormuz.
So the kingdom has relied on the East-West Pipeline, which runs 745 miles across the breadth of the country, to move its crude production from Gulf ports to the port of Yanbu on the Red Sea. From there it can be put on tankers for export. But authorities were forced to shut down the pipeline after an attack Thursday that Saudi Arabia blamed on drones from Iranian-backed militias in Iraq.
Repairing the damage, including at a major pumping facility, could take three to five weeks, the officials, who have been briefed on the matter, told The Associated Press. The pipeline may work partially during the repairs, one of the officials said, but they could not say how much oil might get through.
The officials spoke on condition of anonymity because they weren’t authorized to brief the media.
Three-to-Five Weeks? Really?
No.
In non-war conditions, say an unexpected fire or rupture, the three-to-five assessment might seem reasonable if not excessively conservative.
In this case, if rebels in Iraq, Yemen, or Iran could hit the pipeline once, then they are able to do so again, and again.
It would not be surprising for the route to be down indefinitely, until some agreement is reached between Iran, Yemen, Oman, and Saudi Arabia.
Any guesses how long might that be?
Houthis March On
Meanwhile, Yemen’s Iranian-backed Houthi rebels continued to expand their threat to Saudi shipping routes out of the Red Sea by capturing the strategic islands of Greater and Lesser Hanish, government and Houthi officials said Monday.
The islands lie 100 miles north of the Bab el-Mandeb Strait. The strait is a choke point that connects the Red Sea to the open ocean and Saudi Arabia’s key Asian markets.
The Houthis’ advance also puts them just 20 miles from the U.S. military base in the tiny Horn of Africa nation of Djibouti, on the other side of the Bab el-Mandeb Strait.
For more than a month, the Houthis have been striking Saudi oil infrastructure and shipping in the Red Sea, stepping up pressure on global oil prices and boosting Iran’s leverage in its war with the United States.
The Houthi advances have seemed to come with little resistance from Saudi-backed Yemeni government forces. The rebels deployed on the Hanish islands after hundreds of government-allied forces withdrew from the archipelago, according to two government officials and a Houthi official. The officials spoke on condition of anonymity because they were not authorized to talk to journalists.
A rebel spokesman said the Houthis fired dozens of missiles and drones at the King Khalid Air Base in the southern Saudi city of Khamis Mushait, targeting hangars, radar installations and ammunition depots. The statement on Monday by Brig. Gen. Yahya Saree did not specify when the attack took place, but the Houthis often take hours or days to claim responsibility for attacks.
There was no immediate comment from Saudi Arabia on the Houthi claim of striking the base.
