Threatens loss of 4pc of global oil supply

Saudi Arabia will run out of oil stocks for exports if it doesn’t restart its major pipeline to the Red Sea within days, leading to a loss of up to 4pc of global supply, Saudi oil buyers and traders said.

A further decline in Saudi flows will worsen the global supply crunch, which has already pushed global fuel prices to record highs, spurred inflation around the world and sent U.S. bond yields to the highest levels since the 2008 financial crisis.

Since drone attacks forced Saudi Arabia to shut its huge east-west oil pipeline on Friday, Riyadh has not given full details about the extent of the damage or how long the route will stay off-line, reports Reuters.

The Reuters Power Up newsletter by columnist Ron Bousso provides everything you need to know about the global energy industry. Sources that spoke to Reuters gave varying estimates, with one saying the damage could take as long as five to six weeks to repair, while another said it could be fixed sooner and could resume pumping partially while repairs are ongoing.

Saudi Arabia’s government media office and energy ministry did not immediately respond to requests for comment.

For the past six months, the pipeline running through the desert across the Arabian Peninsula has spared Saudi Arabia from the brunt of the impact of the wartime shutdown of the Strait of Hormuz that has crippled exports from its neighbours.

The world’s biggest exporter has used the pipeline to reroute around 4 million barrels per day around 4pc of global supply to the port of Yanbu on the Red Sea.

But with the pipeline out of service, Yanbu now has stocks to maintain exports for just five to seven days, according to three industry sources familiar with Saudi exports.