Saudi Arabia on Tuesday suspended oil loadings at its Red Sea port of Yanbu and cancelled some crude shipments to European customers after a drone attack damaged a key oil pipeline, according to shipping and trading sources cited by Reuters. The disruption threatens to further restrict oil supplies from the Gulf as Saudi Arabia faces renewed attacks by Yemen’s Iran-backed Houthi movement.
Oil trading and shipping sources told Reuters on Tuesday that Saudi Arabia had informed European customers that some crude cargoes scheduled for loading in September would be cancelled.
Loadings at Yanbu, a major export port on the Red Sea, have also been suspended, the sources said.
The developments follow a drone attack on Saudi Arabia’s East-West oil pipeline last Friday. The kingdom said the attack was launched from Iraq and subsequently shut down the pipeline, which carries crude from its eastern oilfields to the Red Sea coast.
The pipeline has been a crucial route for Saudi oil exports, particularly since the closure of the Strait of Hormuz disrupted shipping through the Persian Gulf.
Oil Prices Rise as Supply Concerns Grow
The interruption to Saudi exports has pushed up oil prices, with Brent crude futures trading near $108 a barrel. Prices in Europe’s physical oil market have risen even further, with benchmark dated Brent reaching about $122 a barrel, according to LSEG data.
Saudi Arabia is expected to try to move more crude through the Strait of Hormuz using so-called dark shipments, trading sources told Reuters. Such shipments involve vessels operating with limited or concealed tracking information.
Similar shipments by the United Arab Emirates and Iraq have helped Gulf oil producers export between 7 million and 9 million barrels of oil a day — around 30% to 40% of pre-war volumes, according to the sources.
Data from Vortexa showed that Saudi Arabia loaded 22 million barrels of oil across 12 vessels at Ras Tanura and Juaymah between 7 and 13 September. That compared with six to seven vessels a week during the preceding three weeks.
Saudi Arabia and Houthis Step Up Attacks
The disruption to oil exports comes amid a sharp escalation in fighting between Saudi Arabia and the Houthis in Yemen. Both sides accused the other of launching attacks on their territory on Tuesday. The reports came days after the Iran-backed group seized strategic areas along Yemen’s Red Sea coast.
Saudi military spokesman Major General Turki al-Malki said the Houthis had targeted three cities in the kingdom, injuring 13 people. He did not specify when the attacks took place.
Meanwhile, the Houthi-run Health Ministry in Yemen’s capital, Sanaa, said Saudi airstrikes had killed three people, including two children, in Taiz province. The Saudi government did not immediately respond to a request for comment about the reported strikes.
Saudi Civil Defense issued emergency alerts overnight in several cities along the country’s western coast, including Jeddah, Yanbu and Taif. Further alerts were issued on Tuesday afternoon for Mecca, Jeddah and Taif.
The alerts were the most widespread across Saudi Arabia in a single day since fighting in Yemen intensified, according to the report.
An attack on Jeddah would represent a significant escalation, as Saudi Crown Prince Mohammed bin Salman has been working from the city in recent days. He held a cabinet meeting there with senior officials on Tuesday.
Houthis Expand Red Sea Occupation
Saudi Arabia has led a military coalition in Yemen since 2015, when the Houthis seized control of the capital, Sanaa. The coalition intervened to support Yemen’s internationally recognised government. A truce in 2022 largely reduced the fighting, but it has unravelled in recent weeks as clashes have intensified between Houthi forces and fighters allied with the Saudi-backed government.
The full extent of the ground fighting remains unclear. However, the UN Office for the Coordination of Humanitarian Affairs says approximately 125,000 people have been displaced in Yemen since September.
In recent days, the Houthis have captured territory along the Red Sea, including the port city of Mokha and Perim Island, which lies in the Bab al-Mandab Strait, the southern entrance to the Red Sea.
The advance is a major setback for Saudi Arabia, which has shifted much of its oil-export activity towards the Red Sea after Iran effectively closed the Strait of Hormuz in the early stages of its war with the United States.