Saudi Arabia shut down East-West crude oil pipeline after multiple attacks by drones from Iraq
www.cnbc.com
Iran-allied Houthi militants in Yemen have escalated strikes on Saudi Arabia this week.
    • empireOfLove2@lemmy.dbzer0.comEnglish
      0·
      24 days ago

      Very bad. That pipeline could move up to 7 million barrels a day around the strait, which is about 35% of what passed thru the strait pre-war. It wasn’t enough but it did marginally offset sea tanker traffic loss.

      More importantly this signals that effectively all gulf production is now on the shutdown list and nobody can bank on it returning or being safely bypassed. The world oil market is now in a permanent 20% supply deficit compared to prewar flows, and we are officially in a 1973 level crisis without a reserve cushion left.

        • empireOfLove2@lemmy.dbzer0.comEnglish
          0·
          23 days ago

          Yikes is right lol

          I’ve been following these markets closely since Russia did its thing in 2022. Back then the markets freaked our about a supply disruption that didn’t fully materialize since the shadow fleet and BRICS nations that didn’t care about sanctions mostly kept Russian oil flowing.

          This time the market took more of a “have a pint and wait for all this to blow over” approach, since the middle east regularly gets into dustups that can be absorbed by SPR’s and global reserves… But they miscalculated just how mentally retarded (I mean that literally, not as a slur) the US and Israeli government is right now. The only reason the markets Haven’t fully exploded yet is because China basically stopped importing half of its oil demand almost instantly, which kept western reserves from draining too fast- but they’ve run out of rope and are now upping refinery runs and opening imports again. The only way out now is demand destruction via sustained crude prices above $120/bbl, which means radical inflation and recession.