Global oil stockpiles are "scarily thin" owing to the U.S.-Iran war, Saudi Aramco chief executive Amin Nasser said Monday, days after G7 nations agreed to release more of their inventories to ease supply concerns. "The system is already straining," Nasser told the Energy Intelligence Forum in London. "And with precious little else the world can turn to, the supply resilience cushion is scarily thin." His remarks came hours after the news that oil flows from the Middle East surpassed pre-war levels last week.
That welcome news for markets has been tempered, however, by furious fighting between Saudi-backed forces and Iran's Houthi rebel allies in Yemen over control of the Bab el-Mandeb Strait, another key energy chokepoint and the southern gateway to the Red Sea. Saudi Arabia's East-West Crude Oil Pipeline was struck again Sunday, a source working in the kingdom's energy sector told French news agency on Monday, adding that the flow of oil through the pipeline had stopped. "The East-West pipeline was attacked again yesterday," the source told AFP.
"A pumping station east of Riyadh in Khurais. It wasn't targeted before. There was big damage and the pipeline stopped again." The news agency reported Monday, however, that oil was still flowing through the pipeline, also citing an unnamed source.
Bloomberg also reported that oil was still flowing, citing people familiar with the matter. News of the strike came a day after the Iran-backed Houthis in Yemen said they had targeted sites in Saudi Arabia belonging to state oil giant Aramco, including infrastructure in Khurais. The East-West pipeline has been targeted multiple times since war erupted across the Middle East, following the U.S. and Israel launching joint strikes on Iran at the end of February.
Last month, Saudi Arabia, the world's top oil exporter, shut the East-West pipeline, which runs about 700 miles between its main oil fields in the east and the Yanbu terminal on the Red Sea. The pipeline was shut down from Sept. 11 to 22, according to commodity-tracking platform Kpler. The Yemeni military announced a broad set of strikes against Houthi targets on Monday after the government declared a new campaign to retake all territory from the rebels, even as the Iran-backed group made fresh gains on the ground.
The declared offensive sets a lofty goal for the beleaguered Saudi-backed government a month after it lost swathes of the country's Red Sea coastline, including key territory around the Bab el-Mandeb Strait — a key choke point for international shipping. Hours after the Yemeni government's announcement, Yemen's military spokesman said its forces launched over 1,000 "strikes against artillery and rocket launcher positions, defensive fortifications, approach and reinforcement routes, supply lines and logistics assets, combat reinforcements" belonging to the Houthis. He later said the military had taken back control of the Bab el-Mandeb Strait.
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