Rapidan Energy CEO on how the Saudi East-West pipeline shutdown will affect the oil market

• The East-West pipeline shutdown, due to damage, is estimated to last from 2-4 weeks to 2-4 months, reducing Saudi Arabia's ability to bypass the Strait of Hormuz for oil exports.
• Saudi Arabia can draw from 8-15 million barrels of storage to maintain Yanbu exports for a couple of weeks, but a prolonged outage will lead to a sharp drop in ex-Hormuz exports.
• The pipeline is highly vulnerable to attacks by Iranian-backed militias, with recent actions by Iraqi militias and ongoing conflict in Yemen indicating increased regional instability and risk to critical oil infrastructure.

The Saudi East-West pipeline shutdown, caused by an attack, significantly reduces 'ex-Hormuz' oil export capacity, with repairs estimated from weeks to months. While Saudi Arabia can use storage for a few weeks, a prolonged shutdown will sharply drop exports from Yanbu. The pipeline's vulnerability to continued attacks by Iranian-backed proxies, coupled with escalating conflict in Yemen, creates substantial geopolitical risk and is driving oil prices higher.