Memorandum
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- Derek Weston via FOX News
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- Economy·6 min to read
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Drone Strike Damages Saudi Pipeline as Oil Chokepoints Tighten
ReDrone Strike Damages Saudi Pipeline as Oil Chokepoints Tighten
A drone attack has badly damaged Saudi Arabia's East-West Pipeline, a key bypass for crude oil, while Houthi rebels expand their reach around the Bab el-Mandeb Strait. The disruptions are pushing up fuel prices for American consumers and complicating global oil flows.
A drone attack has badly damaged Saudi Arabia's East-West Pipeline, a critical bypass that carries crude oil across the kingdom to the Red Sea, according to reports. The strike could leave the pipeline largely out of service for three to five weeks, after it had been moving roughly 2.6 million to 4 million barrels per day in recent weeks. The damage adds new pressure to global energy supply routes already strained by conflict.
At the same time, Iran-backed Houthi rebels have seized additional territory and strategic islands around the Bab el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden and the Indian Ocean. Their capture of Mayun Island, the port of Mokha, and most recently the Greater and Lesser Hanish islands has expanded their reach around one of the world's most important shipping corridors. The moves add pressure to another major route already battered by years of attacks.
The disruptions are already reaching American consumers. U.S. diesel prices hit a record national average of $6.23 a gallon on Monday, according to AAA, while regular gasoline averaged $4.32. Brent crude climbed as high as roughly $110 a barrel during the day. The economic ripple effects extend beyond fuel, with earlier reporting noting that the conflict is making groceries, Amazon packages, and new homes more expensive.
Washington has sharply curtailed Iran's oil exports and trade, but the wider conflict is still disrupting energy supplies elsewhere in the region, especially as Iran-backed Houthi rebels strengthen their stance along the coastline in Yemen. Since the United States reinstated its naval blockade on July 14, no Iranian crude cargoes have successfully crossed the Strait of Hormuz to China, Tehran's largest remaining oil customer, according to Kpler, Vortexa, and. Iranian crude and condensate loadings fell to roughly 220,000 to 255,000 barrels per day in August, down from about 740,000 in July and roughly 2 million in March.
Commercial shipping through Hormuz also remains deeply disrupted. Recent readings from Kpler, which track real-time data on global commodity flows and maritime shipping, have repeatedly put visible commodity-vessel transits in the single digits, even as the U.S. has worked to restore some movement through the waterway.
Miad Maleki, a senior fellow with the Foundation for Defense of Democracies, said the pressure is increasingly reaching beyond Iran's oil industry and into the broader economy. He cited the combined effect of sanctions, the naval blockade, and growing diplomatic isolation. Iran depends heavily on trade through the United Arab Emirates and Turkey, Maleki said, and restrictions on those channels are making it harder to obtain foreign currency and essential imports.
Gasoline could become an especially difficult pressure point. Iran remains one of the world's major crude producers but lacks sufficient refining capacity to meet its own demand, leaving it dependent on imports that have become more difficult to secure. The regime can cushion some of the financial blow by continuing to print currency and pay salaries, Maleki said, allowing inflation to absorb part of the pressure rather than immediately cutting government payrolls. Physical shortages are harder to solve.
But that does not necessarily mean Tehran has deliberately substituted the Bab el-Mandeb for Hormuz as a new source of leverage. Iran expert Arash Azizi said Tehran has already been forced to recognize that its ability to dominate the Strait of Hormuz is weaker than it once claimed. «Iran has realized that some of the leverage it has over the threat of Hormuz is gone,» Azizi said. «[Iran] is not able to close it effectively and is desperately trying to find a way to better its odds.»
Azizi cautioned, however, against treating every Houthi move as part of a coordinated Iranian strategy to transfer pressure from the Persian Gulf to the Red Sea. «Iran has limited control, and the Houthi-Saudi conflict has a dynamics of its own,» he said. Iran encourages and materially supports the Houthis, Azizi said, but does not exercise full operational control over the group. That distinction matters as the Houthis strengthen their position around Bab el-Mandeb. Yet the group has continued to allow many vessels to pass rather than attempting a total closure of the strait.
Azizi described the instability there as a «double-edged sword» for Tehran. Pressure on shipping and Saudi energy infrastructure can raise costs for Iran's adversaries and increase anxiety in global oil markets. But a broader regional conflict can also make it harder for Tehran to achieve what Azizi described as its overriding objective: ending the war, preserving the Islamic Republic, and beginning reconstruction. For Tehran, he said, the immediate goal is therefore less about opening a new front than improving the terms on which it can end the current one. Iran wants «some sort of a deal that puts an end to the war,» preserves the Islamic Republic, and allows it to begin postwar reconstruction, Azizi said.
