Simultaneous Blockade of Saudi Arabia’s Three Main Crude Oil Export Routes and the Surge in International Oil Prices: A Geopolitical Risk Analysis

Executive Summary

Against the backdrop of the Iran-Israel war, Saudi Arabia’s three main crude oil export routes—the Strait of Hormuz, the Bab el-Mandeb Strait and Red Sea shipping lane, and the East-West Pipeline—were paralyzed simultaneously around the same time. Brent crude surpassed $109 per barrel as three separate dynamics unfolded: Iran's pressure on maritime transit, the Houthis' capture of ports and strategic locations, and drone attacks on the pipeline by pro-Iranian militias in Iraq. The structural context for this crisis includes the U.S. retreat from its role as a provider of security as a public good in the Gulf and the fracturing of the united front against Iran among Gulf oil-producing states. As it is highly likely that the three routes will only be partially and sequentially restored, the baseline assumption should be a period of managed high oil prices, with Brent crude remaining in the $100–$110 per barrel range for the next three to six months. South Korean oil refiners, trading companies, shipping firms, and the government must integrate their efforts in diversifying supply sources, redesigning shipping routes, and managing strategic reserves into a unified response system, rather than pursuing them as separate tracks.

I. Situation Analysis

Simultaneous Blockade of Saudi Arabia’s Three Main Crude Oil Export Routes: A Situation Analysis

1. Background and Developments

The crisis began with the U.S. and Israeli airstrikes on Iran in February 2026. Since the war's outbreak, Iran has used restrictions on transit through the Strait of Hormuz as a means of retaliation against Israel and the United States [3][5]. Following the expiration of the Islamabad Memorandum on August 17, the Persian Gulf Strait Authority blacklisted 45 vessels, including a tanker owned by South Korea’s Sinokor Merchant Marine [3]. This move indicates that Iran’s pressure on transit through Hormuz has shifted from a negotiating tactic to the actual exercise of physical force.

Around the same time, Yemen’s Houthi rebels, acting as an Iranian proxy, resumed attacks on the Red Sea and Bab el-Mandeb shipping lane [7]. In September, the Houthis captured the western Yemeni port city of Mocha and secured control over the strategically vital Perim Island [3][15]. To counter this pressure on two fronts, Saudi Arabia signed the Mecca Defense Pact with Türkiye and Pakistan on August 7. However, the pact failed to exert any real deterrence, as it was largely symbolic and lacked a NATO-style automatic intervention clause [7].

Saudi Arabia’s final alternative was the East-West Pipeline. This 750-mile pipeline, running from Riyadh to the Red Sea port of Yanbu, was a bypass for the Strait of Hormuz with a maximum capacity to transport 7 million barrels per day [13]. Since the outbreak of the Iran-Israel war, Saudi Arabia had been diverting its export volumes through this pipeline as navigation in the Persian Gulf became exposed to Iranian threats [16]. However, on September 10, drones launched from Iraqi territory repeatedly struck sections of the pipeline near Riyadh and Medina, prompting the Saudi Ministry of Energy to announce a full suspension of operations on September 11 [1][9][11].

2. Current Situation

The state-run Saudi Press Agency (SPA) officially confirmed that drones originating from Iraq had attacked and damaged the East-West Pipeline [1]. The Iraqi government acknowledged that the attack was launched from its territory, where Iran-linked militias are active, and responded by dismissing one of its military commanders [9]. This can be read as a de facto admission by the Baghdad government of its loss of control over pro-Iranian militias.

The prospects for recovery are dim. Saudi oil buyers and traders have expressed concern that export inventories will be depleted if the pipeline is not brought back online within days [8]. Reuters-affiliated media outlets and regional officials have projected that the pipeline will remain shut down for several weeks [9][16]. The 4 million barrels per day that the pipeline diverted to the port of Yanbu represents approximately 4% of the global oil supply [8].

The market reacted immediately. Brent crude jumped to $107.82 per barrel on the combined news of an attack on shipping and the pipeline strike, while WTI also surpassed $103 [12]. Regional media outlets, including Gulf News, identified the sharpest surge in attacks on ships since the start of the Iran war as the direct cause of the price spike [11]. Amid subsequent fears of further attacks, Brent crude rose again to $109.39 per barrel [4]. A Bahraini media outlet described the 6% single-day surge that pushed both benchmarks over $100 as the “sharpest surge in attacks since the start of the Iran war” [17].

3. Key Actors and Interests

Saudi Arabiais facing an unprecedented period of isolation, with its export routes simultaneously blocked from three directions. The JoongAng Ilbo newspaper defined this as a “triple blockade: Iran to the east, the Houthis to the west, and drones from Iraq targeting the overland bypass route” [1][6]. More damaging is the misalignment with traditional allies such as the United States and the UAE. The UAE has been observed maintaining a separate channel with Iran, while the United States, bolstered by its domestic shale production, appears to be retreating from its role in providing freedom of navigation in the Gulf as a security public good [3][6]. For Saudi Arabia, this situation is fostering growing distrust of the United States, which has taken a passive stance during the crisis despite being the Kingdom’s traditional security guarantor.

Iranis employing a low-cost leverage strategy: holding the Strait of Hormuz as a bargaining chip while using the Houthis as a proxy to apply pressure without leaving a trail of direct intervention [7]. Similarly, the pipeline attack by pro-Iranian militias in Iraq allows Iran to neutralize Saudi Arabia’s final bypass route without being directly implicated. This is a typical Iranian pattern of maximizing negotiating leverage by obscuring responsibility through a multi-layered proxy network [3].

The Houthi RebelsBy capturing Mocha and taking control of Perim Island, the Houthis have solidified their control over the Bab el-Mandeb Strait [3][15]. Their objective extends beyond simply seizing vessels; they aim to use the Red Sea shipping lane itself as negotiating leverage.

The Iraqi GovernmentWhile having de facto admitted its loss of control over the drones launched from its territory, the Iraqi government has failed to demonstrate an effective capacity to rein in pro-Iranian militias, offering only the symbolic gesture of dismissing a commander [9].

The United StatesAlthough the United States has long aimed for low oil prices as part of its economic pressure campaign against Iran [5], it is now taking a wait-and-see approach rather than directly intervening in the blockade of Saudi export routes [6]. This suggests that U.S. security commitments in the Gulf have been structurally weakened in the post-shale revolution era [3].

4. Key Issues

First, the timeline for repairing the East-West Pipeline is critical. If Saudi Arabia’s inventories are depleted before the pipeline is fully restored, the worst-case scenario—the removal of an additional 4% of global supply from the market—will become a reality [8][16].

Second is the question of the Iraqi government’s ability to control the militias. If the commander’s dismissal does not lead to a genuine crackdown, the pipeline could remain a target for repeated attacks [9].

Third, if the rift between Saudi Arabia, the United States, and the UAE is not mended, Saudi Arabia may continue to pursue its own security arrangements, strengthening regional self-help measures such as the Mecca Defense Pact [6][7]. However, given that the pact currently lacks effective deterrent capability, the restoration of Saudi Arabia’s export routes will likely remain a volatile issue, contingent on the separate actions of the three main actors: Iran, the Houthis, and the Iraqi militias.

II. In-Depth Analysis

Simultaneous Blockade of Saudi Arabia’s Three Main Crude Oil Export Routes: An In-Depth Analysis

1. Analysis of Root Causes

The root cause of the current crisis lies in Saudi Arabia’s geography. The kingdom’s crude oil export infrastructure has always been overwhelmingly dependent on its Persian Gulf ports. The East-West Pipeline was constructed as a backup system to mitigate this structural vulnerability. This 750-mile pipeline to the Red Sea port of Yanbu has a designed capacity of up to 7 million barrels per day [13]. However, the current situation has exposed a paradox: the moment a backup system becomes the sole alternative, it transforms into a new single point of failure.

From the outset, Iran’s strategy was not limited to the single option of blockading the Strait of Hormuz. Since the beginning of the war, Iran has used restrictions on transit through Hormuz as a tool for retaliation against the United States and Israel [3][5]. After the expiration of the Islamabad Memorandum, the Persian Gulf Strait Authority intensified pressure on shipping by blacklisting 45 vessels [3]. This action demonstrates that Iran is using its control over the strait as a physical instrument that it can flexibly adjust according to the diplomatic situation.

The Houthi rebels’ resumption of attacks in the Red Sea constitutes the second pillar of Iran’s proxy strategy. The Houthis replicated their pattern from the Gaza war—threatening the Red Sea route by targeting Israel-linked vessels—this time against Saudi Arabia [7]. Through the Houthis, Iran has secured a low-cost form of leverage, allowing it to maintain its negotiating position without any trace of direct intervention [7]. The Houthis’ capture of Mocha and their seizure of control over Perim Island in September signify that this leverage has evolved from a symbolic threat into effective control over the shipping lane [3][15].

The third pillar, the attack on the East-West Pipeline, is a result of the expanded operational autonomy of pro-Iranian militias in Iraq. The Iraqi government acknowledged that the drones were launched from its territory and responded by dismissing a commander [9]. This amounts to a de facto admission by the central government in Baghdad that it has lost effective control over pro-Iranian armed groups on its soil. That all three routes were blocked nearly simultaneously, rather than sequentially, should not be seen as a coincidence. Instead, it can be read as the result of a multi-layered, Iran-directed proxy network systematically neutralizing Saudi Arabia’s alternative routes in parallel.

2. Structural Context

Politically, the most prominent structural factor is the receding role of the United States. Since the shale revolution, the U.S. has effectively withdrawn from its role as the provider of security as a public good, which includes guaranteeing freedom of navigation in the Gulf [3]. The U.S. Navy’s function of ensuring passage through Hormuz, a role it played during the Cold War and the Gulf War, was conspicuously absent in the current crisis. The JoongAng Ilbo described this situation as one of “isolation,” in which even traditional allies like the U.S. and the UAE are out of sync with Saudi Arabia [6]. The UAE’s move to maintain a pragmatic relationship with Iran and keep its distance suggests that the united front against Iran is fracturing even among the Gulf oil-producing states [6].

Economically, the Saudi budget’s dependence on crude oil exports amplifies the impact of this shock. The 4 million barrels per day diverted through the East-West Pipeline represents approximately 4% of the global supply [8]. Saudi oil buyers and traders have expressed concern that export inventories could be depleted if the pipeline is not restarted within days [8]. This indicates a limit to the buffer stocks Saudi Arabia can rely on in the short term, creating a structural vulnerability where the kingdom’s negotiating power could diminish if the crisis is prolonged.

From a security perspective, Iran’s proxy network has matured to the point where it can operate simultaneously on three fronts: Hormuz, Yemen, and Iraq. This means Iran now possesses multifaceted tools of deterrence and coercion capable of pressuring Saudi Arabia’s entire export infrastructure without the direct intervention of its conventional forces. The Mecca Defense Pact, signed by Saudi Arabia, Türkiye, and Pakistan, was an attempt to counter this pressure, but it failed to function as an immediate deterrent because it remained largely symbolic and lacked a NATO-style automatic intervention clause [7].

3. Historical Precedents and Analogous Cases

The closest precedent is the 2019 drone and cruise missile attack on the Abqaiq and Khurais oil facilities. While that attack temporarily knocked out about half of Saudi Arabia’s oil production capacity, the impact on oil prices was short-lived because repairs were completed faster than anticipated. The current crisis is structurally different because it targets the export routes themselves, not production facilities. Damage to production facilities can be resolved by repairs, whereas a route blockade requires a distinct logistical and diplomatic solution in the form of securing alternative routes.

The Houthi attacks in the Red Sea during the 2023–2024 Gaza war also serve as a relevant precedent. At that time, global shipping lines suspended transits through the Red Sea and opted for the longer route around the Cape of Good Hope [7]. This demonstrates a pattern in which market actors, once risks to a shipping lane cross a critical threshold, undertake a self-organizing response by physically rerouting rather than waiting for a political resolution. Europe’s recent moves to secure alternative crude oil supplies are an extension of this same pattern.

The ‘Tanker War’ of the 1980s Iran-Iraq War is another structurally similar case. In response to attacks on maritime shipping lanes, Gulf oil producers at the time pursued the construction of overland bypass pipelines; Saudi Arabia’s East-West Pipeline is itself a product of that era. The current crisis marks the first time that this dual safety net of sea and land routes has failed simultaneously, with the bypass route itself being neutralized nearly half a century after its construction.

4. Key Variables Shaping Future Developments

The first variable is the timeline for restoring the East-West Pipeline. Regional officials and traders anticipate a shutdown of several weeks [9][16]. If repairs are delayed longer than expected, Saudi Arabia’s buffer stocks will be depleted more quickly, increasing the likelihood that the supply shock will be transmitted directly to the spot market.

The second variable is whether Iraq’s central government can restore control over the militias. If the symbolic dismissal of a commander is not followed by substantive measures to strengthen control, the possibility of further attacks on the pipeline will remain [9].

The third variable is the trajectory of negotiations concerning the Strait of Hormuz. A previous EAI analysis presented a baseline scenario of alternating phases of negotiation and tension through an Omani-mediated channel with Iran [7]. If these negotiations collapse, the possibility of a “pessimistic path in which attacks expand to all of Saudi Arabia’s eastern infrastructure” cannot be ruled out [7].

The fourth variable is whether the United States adjusts its level of intervention. The duration of the crisis will depend on whether the U.S. maintains its current policy of selective sanctions enforcement and a wait-and-see posture, or pivots back toward guaranteeing freedom of navigation in the Gulf [3].