Saudi East-West Pipeline Suffers Significant Damage in Drone Attack
Energy markets are unfazed by the news as offsetting Strait of Hormuz export volume grows
U.S. officials have confirmed that Saudi Aramco's East-West Pipeline - the key bypass route carrying Gulf oil around the contested Strait of Hormuz - has been damaged in a Houthi strike. Satellite imaging analysis shows clear and substantial impacts at two pumping stations, including particularly extensive fire damage at one of them.
The news confirms early indications seen Thursday: low-resolution satellite photos revealed a large smoke plume emanating from the pipeline route, and spikes on infrared remote sensing in the same area (VIIRS / NASA FIRMS) indicated active fires. The infrared data showed a large number of additional fire locations along the line, either a sign of emergency flaring or of further damage.
In a statement, the Saudi energy ministry confirmed that the pipeline has been shut down as a precautionary measure after multiple attacks. The strikes Thursday morning resulted in multiple injuries, the ministry said.
A U.S. official said that the attack involved drones launched from a location in Iraq. If accurate, the drones - typically a slow-moving threat class - would have had to transit large swathes of Saudi airspace without interception, raising questions about detection and air defense effectiveness.
Attribution is as-yet unclear. Iranian-backed militia groups have a substantial presence in Iraq, and Yemeni Houthi forces - operating far from home - have previously used Iraqi territory to launch strikes on Saudi facilities. The Houthis have been using their own operating area next to the southwestern Saudi border to strike key Aramco facilities near the Red Sea, including the massive refinery at Jazan. Axios reports that the Trump administration has declined Saudi requests for military assistance in combating an increasingly aggressive and effective Houthi threat.
Brent crude oil fell Friday despite the news of the pipeline attack and Houthi territorial gains near Bab el-Mandeb, dropping three percent to settle at about $104.
While the attack is unwelcome news for Saudi oil shipping out of Red Sea ports, it has been offset by favorable developments for oil shipping in the Gulf region. TankerTrackers.com reports that average daily crude oil flows out of the Strait of Hormuz have hit more than 10 million barrels per day, a significant milestone after months of Iranian restrictions on GCC export flow. The shipping surge - controversial at IMO, given the active threat of Iranian attack and associated risk to life and safety of tanker crews - is complemented by a corresponding jump in STS transfer activity off Fujairah. "Shuttle" tankers associated with GCC exporters offload their cargo to long-haul VLCCs at the comparatively safe Gulf of Oman anchorage for final delivery.
"Even with pipeline transmission now impacted, Saudi crude oil exports have been trending higher over the past couple of weeks after having picked up significantly from the kingdom's heavyweight eastern terminals. Those exports depart via the [Strait of Hormuz] under US CENTCOM protection. [Saudi Red Sea terminals] shall likely export from storage in the meantime. This is not their first rodeo," commented TankerTrackers.com
Decisive Moment in Gulf War: Houthis Position to Close Bab el-Mandeb
The Houthis have accelerated their advance over the past 36 hours in southwest Yemen to complete their capture of the entire Red Sea coastline of Yemen, from their southernmost stronghold all the way down to the Murad Peninsula, rounded off by capturing the Internationally Recognized Government (IRG)’s port at Ras Menhali and the island of Perim, which lies opposite. Neither the IRG itself nor those principally affected by this development, principally Saudi Arabia, have moved in time to reinforce or intervene, notwithstanding that the danger of the Houthi seizure has been apparent for a number of days. Once the Houthis had broken through IRG lines and onto the Tihama Plain, the tactical advantage was with them, as the featureless terrain favors fast movement and lacks defensive obstacles. Nonetheless, the Houthis could have been thwarted, being exposed in the open terrain to air strikes, but airpower never arrived from the IRG’s allies to save the day.
Seizure of the Hanish Islands to the north, and Perim Island midstream in the narrowest section of the southern entrance to the Red Sea at the Bab el Mandeb, has strategic implications likely to impact the course of the wider conflict in the Gulf. By being able to dominate marine traffic in the Red Sea, the Houthis will be able to interdict Saudi (and Gulf) trade routes to and from Asia, which had switched from the Gulf to Saudi Arabia’s west coast ports.
Locations which Houthi forces are reported to have entered, as at September 11
(Google Earth/CJRC, with thanks to expert input from @BashaReport)
Saudi Arabia’s crude exports will be particularly affected. The ability to use the East-West crude pipeline had relieved much of the strain the Saudis suffered from the closure of the Strait of Hormuz, and now the only remaining export route will be northwards through the Suez Canal. Even if the route north through the Suez Canal remains open, costs of diverting around southern Africa if trade is to be maintained with Asia, plus the inevitable congestion which Jeddah and Yanbu are likely to experience, will be major inhibitors of economic activity, and will force oil prices up. The result is likely to be political pressure on the United States from its erstwhile allies in the Gulf to come to a settlement with the Iranians, so as to get trade flowing through the Strait of Hormuz again. The actions of the past few weeks have shown a high degree of strategic foresight on the part of Iran and the Houthis, coordinating their actions to best effect, and leaving their opponents looking inept.
As the gravity of the situation becomes apparent, those most affected may come up with a counter-attack plan, and warfare in Yemen over the past decade has shown that front lines can move quickly. But for the moment, the initiative lies with the Houthis. The Houthis have made statements that their action is directed against the Saudis, who they blame for the imposition of the economic blockade on Houthi areas. But these statements may be designed to assuage immediate fears and to sabotage counter-attack plans. In the end, if the Houthis are on Perim Island and dominate the coastline where the Red Sea is at its narrowest, they will have the option at any time to close down all traffic in the Red Sea, granting or withholding permission to anyone who wants innocent passage – an option which the IRGC had up its sleeve for a long time over the Strait of Hormuz before choosing the decisive moment to play that card.
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