Iran attacked a key Saudi Arabian facility: the impact will be felt worldwide

Saudi Arabia's strategic East-West oil pipeline came under attack amid the war with Iran. The strike hit pumping stations on the pipeline, which is crucial for exports due to shipping disruptions through the Strait of Hormuz. According to US media, drones launched from Iraqi territory may have been used. Simultaneously, Iran struck Qatar's Ras Laffan gas complex, damaging two LNG production lines. Recovery is expected to take three to five years. The consequences are putting pressure on oil and gas markets, especially for Europe ahead of the heating season.

Saudi Arabia's strategic East-West oil pipeline came under attack amid the ongoing war with Iran. The strike hit pumping stations on the pipeline, which is now especially important for Saudi oil exports due to shipping disruptions through the Strait of Hormuz. According to US media, drones launched from Iraqi territory may have been used. The origin of the drones and the extent of the damage have not yet been definitively confirmed. The pipeline allows Saudi Arabia to transport oil from fields in the east of the country to the port of Yanbu on the Red Sea, bypassing the Strait of Hormuz. After shipping through the Strait was disrupted, the importance of this pipeline increased sharply. The problem is compounded by falling production: in August, Saudi Arabia was producing about 6 million barrels of oil per day, the lowest level in more than three decades. At the same time, Qatar is feeling the effects of Iranian attacks. After Iran's strike on the giant Ras Laffan gas complex, two of the 14 LNG production lines were damaged. Recovery, according to available estimates, will take three to five years. Before the war, Qatar supplied about a fifth of global liquefied natural gas. QatarEnergy is negotiating long-term purchases of US LNG. The simultaneous problems of Saudi Arabia and Qatar are creating additional pressure on oil and gas markets. The war has already reduced available global LNG supplies by about 20%. This is becoming particularly sensitive for Europe ahead of the heating season: European gas storage is about 67% full, compared to nearly 80% a year ago. Continued attacks on Middle Eastern energy infrastructure could lead to a new rise in gas and electricity prices.