Houthi Strikes Cause $108 Oil Price Surge as Saudi Pipeline Closes

Satellite imagery shows significant damage to a key oil pipeline in Saudi Arabia. This was targeted The East-West Pipeline, vital for exporting crude oil via the Red Sea, has been shut down as a precautionary measure following days of renewed missile and drone attacks on south-western Saudi Arabia.

The Saudi government has accused the Houthis of carrying out the pipeline strike, which followed days of increased tensions in the region. The closure of the pipeline could reduce oil supplies 6% of global demand, according to experts from trade intelligence firm Kpler.

Satellite Images Captured Monday Show

New satellite images captured on Monday show damage to Saudi Arabia's King Khalid Air Base near Khamis Mushait. Which the Houthis shared they had targeted with ballistic missiles and drones last week. At least three aircraft hangars or shelters appear to have been damaged at the Royal Saudi Air Force facility where US-made F-15 fighter jets are based.

The UN Refugee Agency has reported that more than 100,000 people have been internally displaced due to the conflict in Yemen. The Houthis have been fighting a long-running civil war against Saudi-backed Yemeni pro-government forces. With recent weeks seeing an escalation of attacks on oil infrastructure and military bases.

Saudi Government Has Vowed Respond

The Saudi government has vowed to respond "firmly" to attacks on its territory. The Houthis have accused Saudi Arabia of carrying out more than 50 strikes in western Yemen over the previous 24 hours. Which they claim is a response to their own military operations.

Read More: Carney pitches Canada as 'safe harbour' for global investors in era of economic uncertainty

Energy Market Impact

The price of a barrel of oil has surged since Saudi Arabia confirmed the closure of the pipeline as a precaution. Brent crude was trading at $108 (£80) per barrel on Tuesday, down slightly from $109.80 on Monday. Experts say the closure could take four to six weeks to resolve, given spare-parts availability and impaired supply chains.

Anne-Sophie Corbeau, from the Center on Global Energy Policy at Columbia University, shared pipelines are "like sitting ducks" and recent strikes are a "very important signal" indicating workarounds being used to avoid the Strait of Hormuz. Homayoun Falakshahi, Kpler's head of crude oil analysis, noted that the pipeline's closure could reduce oil supplies.

The Saudi-led anti-Houthi military coalition has reported that a Houthi missile and drone attack had injured 13 people in attacks on what the coalition shared were "civilian objects". The Houthis have denied these claims, saying they targeted military bases and infrastructure.

Key Background and Context

Satellite imagery shows a key oil pipeline in Saudi Arabia has been badly damaged after a strike last week. Which experts have told BBC Verify could take more than a month to repair and force oil prices even higher. The image shows the most significant damage is at a pumping station along the East-West Pipeline.

Which Saudi Arabia has increasingly relied on to export crude oil via the Red Sea rather than through the Strait of Hormuz. There, ships have been attacked The Saudi government has accused Iranian-backed militias in Iraq of the pipeline strike, which followed days of renewed missile and drone attacks on south-western Saudi Arabia Saudi Arabia has retaliated New satellite images also show damage to Saudi Arabia's King Khalid Air Base after a Houthi strike last week.

The Saudi government said on Tuesday it would respond "firmly" to attacks While the Houthis have been fighting a long-running civil war against Saudi-backed Yemeni pro-government forces, the group has stepped up its campaign in recent weeks. It seized control of significant new territory across Yemen's south-western coast last week.

This includes areas overlooking the vital Bab al-Mandab waterway, strengthening its ability to enforce its declared blockade of Saudi shipping. The price of a barrel of oil has surged since Saudi Arabia shared on Friday it was closing the pipeline as a precaution.

Also Read: Two sailors missing after tanker attacked in Strait of Hormuz, Oman

Brent crude was trading as high as $108 (£80) a barrel on Tuesday, down slightly from $109.80 on Monday. Experts from trade intelligence firm Kpler shared the pipeline's closure could reduce oil supplies 6 million barrels per day - or about 3.6% of global demand.

"Based on new information we've received, damage to the pipeline could take four to six weeks to resolve, given spare-parts availability and impaired supply chains," said Homayoun Falakshahi, Kpler's head of crude oil analysis. Anne-Sophie Corbeau, from the Center on Global Energy Policy at Columbia University, said pipelines are "like sitting ducks" and recent strikes are a "very important signal" indicating workarounds being used to avoid the Strait of Hormuz "may not be super useful because they can be destroyed".

The Houthis have targeted other Saudi oil infrastructure with drones and missiles which has led to some operations being suspended. There have also been attacks on military bases.

New satellite images captured on Monday show damage to Saudi Arabia's King Khalid Air Base near Khamis Mushait which the Houthis shared they had targeted with ballistic missiles and drones last week after it was used to carry out air strikes on Yemen. At least three aircraft hangars or shelters appear to have been damaged at the Royal Saudi Air Force facility where US-made F-15 fighter jets are based.

The Saudi-led anti-Houthi military coalition of Arab states shared on Tuesday that a Houthi missile and drone attack had injured 13 people in attacks on what the coalition shared were "civilian objects". The Houthis shared Saudi Arabia had carried out with more than 50 strikes in western Yemen over the previous 24 hours.

The UN Refugee Agency has shared that more than 100,000 people have been internally displaced Additional reporting.