Saudi Pipeline Attacks and Houthi Advances Send Oil Prices Higher

The shutdown of the East-West Pipeline, which serves as a critical conduit for crude moving from Saudi oil fields to the Red Sea, forces exporters to navigate an increasingly volatile corridor. With the Strait of Hormuz already restricted, the loss of this alternative route leaves global supply chains exposed. Houthi militants have recently seized Perim Island and the town of Dhubab, further threatening the security of tankers transiting the Bab al-Mandeb.

Market analysts at Kamco Invest warn that these disruptions have forced buyers in Asia to source crude from as far as Latin America, creating logistical bottlenecks that ripple through to European markets. The International Energy Agency has responded by slashing its global supply forecast by 1.3 million barrels a day, projecting that a return to normal flow in the Middle East may not materialize until 2027.

While the International Energy Agency anticipates a sharp decline in consumption, OPEC maintains a more tempered outlook. The cartel expects demand growth of roughly 400,000 barrels a day for the year, signaling a commitment to current production levels despite the mounting pressure on traditional export routes.