Saudi Arabia will run out of oil stocks for exports if it doesn't restart its major pipeline to the Red Sea within days, leading to a loss of up to 4% of global supply, Reuters reported, citing Saudi oil buyers and traders.
A further decline in Saudi flows will worsen the global supply crunch, which has already pushed global fuel prices to record highs, spurred inflation around the world and sent U.S. bond yields to the highest levels since the 2008 financial crisis.
Sources said the damage could take as long as five to six weeks to repair, but it could be fixed sooner and could resume pumping partially while repairs are ongoing.
The world's biggest exporter has used the pipeline to reroute around 4 million barrels per day to the port of Yanbu on the Red Sea. But with the pipeline out of service, Yanbu now has stocks to maintain exports for just five to seven days. Saudi Arabia also has stocks to supply customers for several days from Egypt's ports of Ain Sukhna on the Red Sea and Sidi Kerir on the Mediterranean.
