Oil’s backup plan buckles under pressure from attacks

For decades, the biggest geopolitical risk hanging over the oil market has been the Strait of Hormuz. Before the conflict in Iran erupted in late February, roughly one-fifth of the world’s petroleum liquids passed through the narrow waterway separating Iran and Oman, making it the most important oil chokepoint in the world.

Now, with shipping through the Strait of Hormuz severely disrupted, Gulf producers are increasingly relying on the limited alternatives available to keep oil flowing. For Saudi Arabia, the most important of these is the East-West pipeline, which carries crude across the Arabian Peninsula to the Red Sea.

But that escape route is now vulnerable to attack as well. Drone strikes forced Saudi Arabia to shut the pipeline after it had been carrying around 4 million barrels per day to the Red Sea port of Yanbu, equivalent to roughly 4% of global oil supply.

Reuters reported that available inventories at Yanbu may be sufficient to maintain recent export levels for only five to seven days if pipeline operations do not resume. Estimates for repair times vary widely, with one oil industry source suggesting that fully restoring the pipeline could take five to six weeks, although partial operations could resume sooner.

Why the East-West pipeline matters

The problem does not end at Yanbu. Iran-aligned Houthi forces have advanced along Yemen’s Red Sea coast and reached Perim Island, located in the Bab el-Mandeb Strait at the southern entrance to the Red Sea.

The Houthis’ latest advance puts the group in a stronger position to threaten another critical artery for global energy at a time when Saudi Arabia is relying more heavily on its Red Sea exports. The primary alternative route for bypassing the Strait of Hormuz now leads toward a second chokepoint that is itself facing growing security risks.

Under normal conditions, the Strait of Hormuz accounts for an extraordinary share of global energy trade. Data from the US Energy Information Administration (EIA) show that oil flows through Hormuz averaged 20.9 million barrels per day during the first half of 2025, equivalent to around 20% of global petroleum liquids consumption.

Saudi Arabia and the United Arab Emirates operate pipelines capable of bypassing the strait, but the EIA estimates their combined capacity at only around 4.7 million barrels per day. While significant, that represents only a fraction of the oil that normally moves through Hormuz.

Saudi Arabia’s East-West pipeline is the most important of these alternatives. It transports crude from the kingdom’s eastern production region across the Arabian Peninsula to Yanbu, allowing Saudi oil to reach the Red Sea without passing through the Strait of Hormuz.

Under normal conditions, this alternative route provides a form of insurance against supply disruptions in the Arabian Gulf. During the current conflict, however, the pipeline has become a vital artery for maintaining exports while the usual route remains severely constrained.

The shift is clearly visible in shipping data. The latest EIA figures showed oil flows through the Strait of Hormuz falling from 21.6 million barrels per day in the fourth quarter of 2025 to just 4.9 million barrels per day in the second quarter of 2026.

Over the same period, flows through the Bab el-Mandeb Strait increased from 5.4 million barrels per day to 8.1 million barrels per day. A significant part of the global oil transportation system has therefore already been rerouted in response to the conflict.

That makes the attack on the East-West pipeline far more consequential than it would have been under normal circumstances. Alternative infrastructure becomes more valuable when the primary route is disrupted, and that is precisely when the pipeline itself has come under attack.

Earlier this year, I wrote in Forbes that Iran’s most powerful strategic weapon was not necessarily a nuclear bomb, but the geography it controls around the Strait of Hormuz. The latest attack extends that lesson beyond Hormuz itself. Infrastructure built to reduce dependence on one chokepoint can create new vulnerabilities elsewhere.

Inventories only buy time

Saudi Arabia holds substantial crude inventories at Yanbu, so shutting down the pipeline does not immediately halt exports from the port. But storage can compensate for lost pipeline flows only temporarily.

Current inventories at Yanbu are estimated to cover roughly five to seven days at recent export rates, while additional Saudi crude stored at Egyptian ports provides another limited buffer.

If repairs take weeks rather than days, those inventories will eventually become a constraint on exports.

Saudi production had already fallen sharply during the conflict. The kingdom reported to OPEC that its output declined to 6.2 million barrels per day in August, down from 10.9 million barrels per day in February.

If the pipeline remains offline for an extended period, Saudi Arabia could face additional difficulty maintaining exports despite its enormous oil reserves. Having oil underground does not necessarily mean being able to deliver it when pipelines, ports and shipping routes are disrupted.

Another chokepoint at the other end

Even getting crude to Yanbu solves only part of the problem. Tankers leaving the Red Sea still need to reach their customers, while shipments bound for Asia generally pass through the Bab el-Mandeb Strait between Yemen and the Horn of Africa.

Around 7% of global oil supply passes through the strait, and the Houthis have already demonstrated their ability to disrupt commercial shipping in the region. Their latest movements increase the risks surrounding a route that Saudi Arabia now needs more than ever.

That does not necessarily mean Bab el-Mandeb will close. Shipping does not have to stop entirely to impose significant economic costs. Higher insurance premiums, vessel diversions and longer routes around Africa all consume time and tanker capacity.

The strategic problem is that Iran has demonstrated its ability to disrupt the primary export route through the Strait of Hormuz on the eastern side of the Arabian Peninsula, while Iran-aligned forces can threaten shipping near Bab el-Mandeb on the western side.

Between those two chokepoints lies the pipeline designed to give Saudi Arabia an alternative when the Strait of Hormuz becomes unreliable.

What does this mean for oil prices?

Oil markets are already reflecting the growing pressure. Brent crude futures settled at $104.61 a barrel on Friday, while West Texas Intermediate ended the session at $100.05.

Both benchmarks gained more than 8% during the week despite falling on Friday following reports of potential diplomatic talks over shipping through the Strait of Hormuz.

Friday’s oil market report showed how quickly prices have responded as attacks spread beyond the original shipping routes in the Gulf.

There are still factors preventing prices from rising even more sharply. Higher energy prices can weaken demand, production outside the Arabian Gulf provides an important buffer, and inventories have helped offset supply disruptions.

But those safeguards are limited, and every additional infrastructure problem leaves the market with fewer alternatives if something else goes wrong. That is why the time required to repair the East-West pipeline matters so much.

If Saudi Arabia restores a significant portion of the pipeline’s capacity quickly, the shutdown could ultimately prove to be another temporary shock in an exceptionally volatile year.

But if repairs stretch into several weeks while pressure around Bab el-Mandeb continues to intensify, another significant portion of the oil still reaching consumers around the world could be put at risk.

The market is effectively discovering how much spare logistical capacity remains after both the primary route and its most important alternative have come under pressure.

The bigger picture

For decades, discussions about energy security in the Middle East have focused on what might happen if Iran closed the Strait of Hormuz or seriously disrupted shipping through it.

Producers responded by building pipelines, storage facilities and alternative export routes, and those investments have helped soften the impact of the current crisis.

But infrastructure that bypasses chokepoints does not eliminate geopolitical risk. It redirects energy flows through a different set of pipelines, ports and shipping corridors, each with vulnerabilities of its own.

That is the broader lesson from the latest attacks: energy security depends not only on possessing oil, but on having enough alternatives to produce, transport and deliver it when part of the system breaks down.

The oil market already understands how vulnerable the Strait of Hormuz can be. It is now discovering that the route designed to bypass Hormuz has vulnerabilities of its own as well.