Saudi Arabia's Hormuz Bypass Is Now Offline

Key Takeaways

• A drone attack has shut the pipeline Saudi Arabia uses to avoid the Strait of Hormuz.
• Stored crude at the port can cover exports for about a week, no longer.
• Both of Saudi Arabia's export routes are now exposed at the same time.

The attack on Saudi Arabia's East-West pipeline has closed off a vital lane for oil. For the past six months, the 1,200-kilometre route has been one of the oil market's most important safety valves (Reuters, via Japan Times). It carries crude from Abqaiq to the Red Sea port of Yanbu, avoiding the Strait of Hormuz.

Saudi Arabia temporarily shut down the pipeline after drone strikes in the Riyadh and Medina areas on 10 September 2026 (Al Jazeera). Its maximum capacity is around seven million barrels per day (although the amount available for export is lower because some crude supplies refineries on the western coast). Recent flows to Yanbu were closer to four million barrels per day which is about 4% of global oil supply (Reuters, via TimesLIVE). This is why the shutdown matters even if the damage proves temporary.

For now, stored crude can keep some exports moving. Industry estimates suggest Yanbu has enough accessible inventory to maintain shipments for 5-7 days (not long at all) (Reuters, via TimesLIVE). What happens after that depends on the speed of repairs and it is unclear how bad the damage is. Estimates range from a partial restart relatively soon to several weeks of work (Reuters, via TimesLIVE). The increased availability of cheap military drones has exposed a serious weakness with oil pipelines.

This isn't a new issue. Seven years ago this week, a drone and missile attack on Saudi Aramco facilities caused a shutdown sending oil markets into a panic. That attack caused 5% of global oil production to halt in its tracks (US Congressional Research Service).

Saudi oil produced near the Persian Gulf would normally leave through Hormuz. The East-West pipeline shifts it across the country to the Red Sea. But, then they have a similar small passage at Bab el-Mandeb. At almost the same time as the pipeline attack, Houthi forces captured Perim Island inside that strait, strengthening their ability to threaten shipping at the southern entrance to the Red Sea (Reuters, via Rappler). Now, both routes have the same problem.

As mentioned in previous articles, oil feeds directly into transport, manufacturing, agriculture and food prices. A lasting rise in crude could place renewed pressure on inflation while also weakening household spending and business activity. Central banks could then face a catch 22 situation of hiking and seriously damaging the economy, or letting inflation run rampant. The market is not pricing a permanent loss, however: Brent settled at US$104.61 a barrel on Friday 11 September 2026, down 2.81% on the day as talks over Hormuz shipping were reported, and high prices, non-Gulf production and inventories all work against a runaway spike (Investing.com, Forbes).

What it means for investors

Energy shocks that lift inflation while slowing growth sit outside what interest rates can fix, and gold has historically been used as a hedge against exactly that combination. A fast repair at Yanbu could take the risk premium out of crude just as quickly as the attack put it in, so this is context for portfolio balance rather than a trade. Ainslie Bullion's gold and silver range covers investors positioning for that kind of uncertainty.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.