Saudi Pipeline Damage Tightens Oil Routes as Houthis Gain Red Sea Islands

Saudi Arabia’s East-West Pipeline may remain mostly out of service for three to five weeks after a September 11 drone attack, according to officials briefed on the damage. The estimate came as Yemen’s Houthi forces reportedly seized the Greater and Lesser Hanish islands in the southern Red Sea, expanding their position near the Bab el-Mandeb shipping route.

The two developments affect Saudi Arabia’s main alternatives to the Strait of Hormuz, but they do not mean Saudi exports have stopped or that the global market has immediately lost the pipeline’s full reported capacity. The immediate consequence is a narrower margin for moving Gulf crude if attacks continue around either chokepoint.

Pipeline shutdown leaves repair timing uncertain

The attack forced the shutdown of the roughly 1,200-kilometer East-West Pipeline on September 11, the Associated Press reported. Saudi Arabia blamed drones from Iranian-backed militias in Iraq. Aramco, which operates the line, had not immediately commented on the reported damage.

The pipeline crosses Saudi Arabia from Gulf production areas to Yanbu and other export facilities on the Red Sea coast. That route allows crude to reach tankers without passing through Hormuz, the narrow waterway between Iran and Oman.

Two regional officials who were briefed on the damage told AP that repairs could take three to five weeks, including work at a major pumping facility. One said the line might operate partially while repairs continue. The officials spoke anonymously because they were not authorized to brief the media, so the estimate is not a formally announced Saudi government timetable.

The IEA says the pipeline system has a total design capacity of 5 million barrels per day. Aramco reported in March 2025 that capacity had been increased to 7 million barrels per day, but the agency says sustainable flows at that level have not been fully tested. The IEA estimated that about 2 million barrels per day was being used in early 2026, although actual available capacity also depends on operating conditions and export facilities on Saudi Arabia’s west coast.

Houthi gains move closer to Bab el-Mandeb

On September 14, Houthi officials and officials from Yemen’s internationally recognized government said the group had captured Greater and Lesser Hanish, islands about 160 kilometers north of Bab el-Mandeb, according to AP.

The reported seizure followed the Houthis’ capture of the Red Sea port of Mokha and Mayun, also known as Perim, an island inside the Bab el-Mandeb Strait. The sequence gives the group a stronger position near a passage used by oil tankers, cargo ships and other commercial vessels. It does not establish complete Houthi control of the strait, and the effect on future shipping remains uncertain.

Bab el-Mandeb connects the Red Sea with the Gulf of Aden and the wider Indian Ocean. Ships using the route can avoid the longer journey around Africa. Rising insecurity can increase insurance, security and freight costs even when vessels continue moving.

The IEA’s maritime monitor warns that regional traffic data have limitations because of GPS jamming, automatic identification system spoofing and vessels going dark. That makes it harder to measure changes in tanker movements in real time.

Oil markets have less room for another disruption

The IEA’s September 11 Oil Market Report projects world oil supply at an average of 100.7 million barrels per day in 2026, down 5.7 million barrels per day from 2025. It says the expected recovery in Middle East supply has been deferred until 2027.

The agency also reported that observed global oil inventories fell by 95 million barrels in August, bringing cumulative draws since February to 507 million barrels. Refinery output is below last year’s level, diesel markets are especially tight and tanker costs have risen sharply as security risks disrupt Middle East flows.

The IEA estimates that nearly 15 million barrels per day of crude, about 34% of global crude oil trade, passed through Hormuz in 2025. It puts available alternative crude-export capacity through Saudi Arabia and the United Arab Emirates at roughly 3.5 million to 5.5 million barrels per day. Those figures show why bypass routes matter, but they are not a one-for-one measure of an immediate global supply loss.

Saudi Arabia may restore partial pipeline flows, redirect some exports or use storage and other logistical options. The concern is that damage to one bypass route leaves the market more exposed if the Red Sea route also becomes harder or more expensive to use.

What consumers and businesses should watch

For consumers, the immediate effect remains uncertain. A prolonged disruption could add pressure to gasoline and diesel prices, shipping costs and energy-intensive businesses worldwide, particularly if refiners face higher freight bills or tighter access to Gulf crude.

Importing countries in Asia are especially exposed to disruptions around Hormuz and Bab el-Mandeb, while freight and insurance increases can spread through global supply chains. The central issue is not that one outage automatically removes 7 million barrels per day from the market. It is that several constrained routes could leave buyers with fewer dependable ways to receive Gulf oil.

What happens next

The key indicators will be whether Saudi Arabia restores partial pipeline operations, how quickly repairs progress and whether tanker movements from Yanbu change. Governments and traders will also watch for further Houthi advances, additional attacks on energy infrastructure and diplomatic or security measures around the two chokepoints.

The next few weeks should show whether the pipeline damage is a temporary logistical setback or part of a broader deterioration in the routes that connect Gulf producers with overseas buyers.

Sources

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