Analysis of Pipeline Shutdown Impact on Global Crude Supply

Firms analyzed the potential market impact of a shutdown of Saudi Arabia's East-West pipeline. The pipeline issue is linked to export constraints at the Hormuz Strait, which have shifted a substantial volume of Saudi exports to the pipeline-connected Yanbu port. According to the analysis, Asian markets are exposed to this supply risk, as Saudi crude accounted for 34.1% of South Korean crude imports in July.

The potential shutdown of the pipeline could put about 4 million barrels per day of Asia-bound supply at risk. This supply risk affects major crude importers, including South Korea, Japan, China, and India. The oil market could lose 120 million barrels if the pipeline is closed for a month and storage is drawn down.