Houthi attacks, pipeline outage threaten Saudi oil exports as Riyadh responds

Houthis escalate strikes on Saudi Arabia as Riyadh pushes back: The Houthis have attacked a military base in Najran province’s Sharurah, the group’s military spokesperson Yahya Saree said yesterday. Meanwhile, a projectile fell in Al Tawwal governorate, injuring two people and damaging a mosque and other buildings, Saudi civil defense said.

The Kingdom retaliated with 129 strikes over the weekend, with F-15 and Typhoon fighter jets launched from military bases in Khamis Mushait and Taif striking across Taiz, Marib, Hodeidah, Al-Jawf, Saada, Amran, and Hajjah, Saree said in a separate post. Yemen’s military also said it carried out three airstrikes against Houthi positions and barracks in Taiz yesterday.

Thousands in casualties and displacements: More than 500 government fighters have been killed and about 1.5k wounded on the west coast since 9 August, the National Resistance, a government-allied force, said. Some 85k people in Yemen have fled the fighting since July, and around 2k have crossed the Red Sea into Djibouti, according to the International Organization for Migration.

Ongoing attacks undermine global oil supply

Riyadh could run out of oil stocks for export within days if its East-West pipeline is not restarted, potentially removing up to 4% of global supply from the market, Saudi oil buyers and traders told Reuters. Yanbu has an estimated storage capacity of about 35 mn barrels, while Egypt’s Ain Sukhna and Sidi Kerir can hold around 18 mn and 20 mn barrels respectively.

Current stocks are below full capacity, while repairs could take weeks: Yanbu has enough stocks to maintain exports for only five to seven days, with the Kingdom also having several days’ worth of stocks at Egypt’s Ain Sukhna and Sidi Kerir ports. Repair estimates vary, with one industry source putting the timeline at five to six weeks, while another said partial flows could resume as work continues.

ICYMI- Saudi Arabia temporarily shut its East-West oil pipeline on Friday after it was targeted by several drones launched from Iraq. Meanwhile, the Houthis expanded their control over Yemen’s Red Sea coast, reaching the strategic islands of Perim and Hanish and the coastal towns of Mocha and Dhubab. Supply is already stretched, with the International Energy Agency putting August supply at 6 mn bbl / d, down 2.3 mn bbl / d from July and the lowest level in over 30 years.