DUBAI-Saudi Arabia shut down a crucial pipeline that allowed the kingdom to continue exporting crude oil after Iran closed the Strait of Hormuz, saying it had been attacked multiple times as fighting across the Middle East flared.
The East-West pipeline can carry up to 7 million barrels of crude from Saudi Arabia's oil-producing heartland on the Persian Gulf to the port of Yanbu on the Red Sea. From there, the Saudis had been able to ship oil to customers across the world, alleviating the squeeze on global oil supplies and keep crude prices in check.
A senior Saudi official familiar with the matter said the attacks originated from Iraq on Thursday, where Iran-backed militias have repeatedly targeted the kingdom's infrastructure. The kingdom's Energy Ministry said the attacks caused injuries and led the kingdom to shut down the pipeline, but didn't specify who targeted it.
NASA satellites that track wildfires detected possible blazes overnight into Friday along the East-West pipeline south of Medina. The locations over the past month haven't shown high heat readings there.
The pipeline hit comes as Iran-backed Houthi militants in Yemen cemented their hold on the Bab al-Mandeb strait, another key chokepoint for Saudi oil exports that connects the Red Sea to the Indian Ocean and sea routes to Asia. The Houthis took control of Perim Island, Saudi and Yemeni officials said, and reached the Yemeni ?town of Dhubab, which sits directly on the strait, capping a series of swift Houthi gains.
Oil markets have been rising in recent days, with Brent crude trading above $104 a barrel Friday, as traders are focused on whether strikes on pipelines, ports and tankers could further reduce the amount of Gulf oil reaching the global market. That in turn is hitting the bond market, raising borrowing costs including for mortgages.
The Houthi advances and any significant damage to the East-West pipeline could boost oil prices toward $120 a barrel, though the fallout will depend on the extent of damage, said Hamad Hussain, an economist at Capital Economics.
"For as long as the conflict drags on, the risks to energy supplies and prices will persist," Hussain said.