Crude oil prices rose on Monday after Saudi Arabia closed its critical East-West pipeline, which bypasses the Strait of Hormuz, following a drone attack that damaged the infrastructure. Brent futures, the international benchmark, gained 1% to close at $105.68 per barrel after nearly reaching $110 earlier in the session, while U.S. crude oil advanced 1.3% to settle at $101.39 after approaching $105. The market had already seen a 9% increase in prices the previous week amid escalating tensions between the U.S. and Iran [1].
The drone attack, launched from Iraq on September 11, 2026, caused significant damage to a pump station on the pipeline, forcing the Saudi government to shut down the key crude oil artery. Riyadh has not disclosed the extent of the damage or provided a timeline for reopening the pipeline. According to Andy Lipow, president of Lipow Oil Associates, the pump station appears to have taken serious damage, and while Saudi Arabia may be able to bypass the pump and restart the pipeline at lower output, full repairs could take months based on available images [1].
Market analysts noted that the relatively contained price reaction suggests expectations that Saudi inventories could cushion exports in the near term. However, Janiv Shah of Rystad Energy warned that if the disruption extends beyond the five-to-seven-day inventory cushion, prices could rise sharply. Matt Smith, director of commodity research at Kpler, estimated that the market could lose 120 million barrels in exports if the pipeline remains closed for a month and storage at the Red Sea port of Yanbu is drawn down. Smith emphasized that losing 120 million barrels would be highly supportive for prices, especially given the current tightness in the global oil market [1].
The attack also led to the postponement of a diplomatic meeting between Iran and Gulf Arab states, which was scheduled for Monday in Oman to discuss the situation in Hormuz. Oman's Foreign Minister Badr Albusaidi stated that the meeting was postponed in the interest of consensus but reaffirmed the commitment to fostering regional stability and cooperation [1]. Satellite imagery confirmed fire damage and blackened ground at the pipeline's pumping station following the attack [1].
CONCLUSION
The closure of Saudi Arabia's East-West pipeline after a drone attack has tightened an already constrained oil market, pushing prices higher and raising concerns about prolonged supply disruptions. While current inventories may cushion the immediate impact, analysts warn that an extended shutdown could lead to significant price increases. The postponement of regional diplomatic talks adds further uncertainty to the market outlook.