Why a Saudi Arabia pipeline closure could drive up gas prices

The closure of a critical pipeline in Saudi Arabia, recent activity by Houthi rebels near the Bab el-Mandeb Strait, and the war in Iran impacting the Strait of Hormuz have compounded to push crude oil prices up to over $108 a barrel.

The Saudi East-West oil pipeline moves an estimated 7 million barrels a day across Saudi Arabia to the Red Sea. Saudi Arabia said on Sept. 11 that they were shutting down the pipeline as a precautionary measure after multiple attacks by drones launched from Iraq struck near the pipeline. Reuters estimates the pipeline moves about 4% of the global oil supply.

Satellite imagery captured by Vantor on Sept. 11 shows damage to structures near the pipeline.

According to AAA, diesel has hit a new high on Sept. 14 of $6.23 for the national average.

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Because oil is traded on a global market, disruptions to supply anywhere can drive up crude prices everywhere, including in the United States.

The Houthis on Sept. 14 said they fired dozens of missiles and drones at a military airbase in Khamis Mushait in southern Saudi Arabia, targeting aircraft hangars, radar systems, runways and ammunition depots in retaliation…

Original source: https://www.usatoday.com/news/nation/