12th September 2026
For weeks, the world's attention has been focused on the Strait of Hormuz and what happens to the oil market if tankers cannot safely pass through one of the world's most important shipping routes.
Now there is a new problem.
Saudi Arabia has temporarily shut down its East-West oil pipeline after it was attacked by drones launched from Iraq. At almost exactly the same time, Iran-aligned Houthi forces in Yemen have tightened their grip around the southern entrance to the Red Sea.
That matters because the East-West pipeline was supposed to be one of Saudi Arabia's great insurance policies.
If tankers cannot get through the Strait of Hormuz, Saudi Arabia can send oil across the Arabian Peninsula by pipeline to Yanbu on the Red Sea, where it can be loaded onto tankers without passing through Hormuz.
Except that route has now been attacked.
The pipeline runs for about 1,200 kilometres from Saudi Arabia's eastern oil-producing region to Yanbu. In recent months it has been carrying around 4 to 5 million barrels of oil a day, equivalent to roughly 4% to 5% of global oil supply, according to Reuters. Saudi Arabia says the shutdown is a precaution while damage from the attack is assessed.
That does not mean that 4 to 5 million barrels a day have suddenly disappeared from the world market. Saudi Arabia has oil in storage and other ways of moving crude.
But it does remove an important piece of flexibility at exactly the wrong time.
Saudi Arabia is being squeezed from both sides
The geography tells the story.
Saudi Arabia's main oilfields and processing facilities are in the east, beside the Persian Gulf. Normally, crude can be loaded onto tankers and sent through the Strait of Hormuz.
But the conflict has made tanker traffic through Hormuz extremely difficult.
The East-West pipeline provides an alternative. It crosses the country to Yanbu on the Red Sea.
Now that pipeline has been shut.
And the Red Sea route is becoming more difficult as well.
Reuters reports that Houthi forces have seized the strategically important island of Perim, also known as Mayun, at the entrance to the Bab el-Mandeb Strait. That is one of the world's important maritime chokepoints, connecting the Red Sea with the Gulf of Aden and the wider Indian Ocean.
The result is an uncomfortable possibility.
Saudi Arabia could find that its traditional route is blocked, its alternative pipeline is damaged and its Red Sea export route is increasingly exposed to attack.
That is very different from having one isolated oil facility hit.
The oil market has noticed
Brent crude has moved back above $100 a barrel as the latest developments have emerged.
That is particularly significant because oil had recently been falling, raising hopes that the market was beginning to look beyond the worst of the disruption.
Those hopes may now be premature.
Oil prices are not determined simply by how many barrels are physically lost today. Traders also price in the possibility of what might happen tomorrow.
If the East-West pipeline is repaired quickly, the immediate effect could be limited.
If it remains closed for days or weeks, however, traders will start asking a different question.
What happens if there is another attack?
That is where the risk becomes much greater.
A single damaged pumping station is a repair problem.
Repeated attacks against pipelines, pumping stations, ports and refineries become a supply-security problem.
Saudi Arabia is being cautious
There is another remarkable aspect to the latest development.
Saudi Arabia has not immediately retaliated against Iraq.
The Saudi government says the drones originated from Iraqi territory, while Baghdad has condemned the attack and launched an investigation. Iraq has also dismissed a military commander and closed a major border crossing with Iran as part of its response. Saudi Arabia has so far agreed to give the Iraqi government an opportunity to act, while reserving the right to protect its own interests.
That restraint may be important.
A Saudi military response inside Iraq could widen the war dramatically.
But Riyadh also has to consider the possibility that failing to respond could encourage further attacks.
It is an unenviable position.
And then there are the Houthis
The developments in Yemen make the situation even more complicated.
The Houthis have been attacking shipping in and around the Red Sea for years, but their recent territorial gains around the Bab el-Mandeb give them a potentially stronger position.
The significance is not simply that another piece of territory has changed hands.
It is that the Houthis now have greater potential leverage over one of the routes that Saudi Arabia needs if its East-West pipeline is to provide an effective alternative to Hormuz.
The two developments therefore reinforce each other.
Hormuz is difficult to use.
The Saudi pipeline is temporarily closed.
The Red Sea route is becoming more dangerous.
Suddenly the world's oil market is looking at a potential bottleneck stretching across the entire Arabian Peninsula.
What does this mean for Britain?
Britain does not obtain all its oil from the Middle East, so it would be wrong to suggest that a Saudi pipeline shutdown automatically means petrol stations running dry in Britain.
That is not how the international oil market works.
But Britain buys oil on a global market.
If a major producer loses the ability to move several million barrels a day through its preferred export routes, the price can rise internationally. That affects petrol and diesel, transport costs, heating costs and eventually the prices of goods that have to be moved around the country.
For households already dealing with higher energy costs, another sustained oil-price increase would therefore arrive at an awkward time.
And for rural areas such as Caithness, where people can face long journeys for work, shopping and medical appointments, fuel prices are particularly important.
The bigger danger is escalation
The most important figure to watch may not actually be today's oil price.
It is how long the pipeline remains closed.
If Saudi Arabia restores it quickly, the market may settle down.
If repairs take longer, or further attacks occur, the calculation changes.
And if the attacks spread to other Saudi infrastructure, the world could find itself dealing with something much more serious than a temporary disruption.
The extraordinary thing about the present situation is that Saudi Arabia built the East-West pipeline partly because it had already learned the danger of depending upon the Strait of Hormuz.
It was an insurance policy against exactly the sort of crisis now unfolding.
But an insurance policy is only useful if the alternative route remains open.
That is the uncomfortable lesson from the latest attacks.
The world has spent years worrying about what happens if the oil route through Hormuz is blocked. It may now have to consider something more worrying: what happens if Saudi Arabia's backup route is blocked too?
For an oil market already above $100 a barrel, that is a question traders will not be able to ignore.