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Saudi Pipeline Attack Sparks Global Oil Supply Fears and Price Volatility

Energy Minerals · Oil & Gas Production · yonhap_finance · 2026-09-17

A drone strike on a key Saudi Arabian pipeline has triggered concerns over global oil supply, with experts warning of potential price spikes to $120 per barrel.

What Happened

Supply Disruption: The shutdown of Saudi Arabia’s critical East-West pipeline following a drone attack has sent shockwaves through the global oil market. Analysts estimate that a month-long outage could result in a shortfall of 120 million barrels, representing roughly 4% of global supply.

Geopolitical Tensions: The incident occurs amidst escalating military conflict between Saudi Arabia and Houthi rebels in Yemen. With the pipeline serving as a vital bypass for the Strait of Hormuz, the attack has significantly heightened concerns regarding regional energy security.

Market Outlook: Goldman Sachs has warned that continued military activity in the Persian Gulf and Red Sea could drive international oil prices as high as $120 per barrel. Market participants remain highly sensitive to updates regarding the timeline for repairs and the stability of the region.

Recovery Efforts: While the U.S. government remains optimistic that the disruption will be temporary, the timeline for full restoration remains unclear. Saudi Aramco is reportedly exploring alternative export methods, such as ship-to-ship transfers, to mitigate the impact on long-term buyers.

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