Saudi Arabia has shut down its critical Petroline pipeline following drone attacks linked to Iran-backed Houthi rebels, raising concerns over potential increases in global oil prices. The pipeline, which transports crude oil from Saudi Arabia's Eastern Province to the Red Sea port of Yanbu, was targeted as the Houthis advanced rapidly along Yemen’s entire Red Sea coastline, securing control of three strategic islands in the region.

The Petroline, stretching approximately 745 miles, was established to bypass the Strait of Hormuz, a key maritime chokepoint for oil shipments vulnerable to disruption. With the closure of this pipeline, tankers loading at Yanbu are exposed to heightened risks from Houthi forces positioned along Yemen’s southern coast. The narrow Bab al-Mandab strait—a critical passage for global shipping narrowing to about 16 miles—has become especially perilous, as the Houthis possess short-range anti-ship missiles and drone boats capable of launching attacks against vessels.

While the Houthi movement insists that navigation remains safe for all vessels except Saudi ones, they have warned that a coordinated attack by allied foreign powers could prompt a complete closure of the Bab al-Mandab strait. Alternative export routes involving transit through the Suez Canal into the Mediterranean and then around the Cape of Good Hope would significantly increase shipping distances and costs. Energy analysts suggest that such disruptions could further elevate crude prices, already above $100 per barrel, intensifying fuel and energy price pressures ahead of the northern hemisphere winter.

Before the attack, the Petroline was responsible for moving between five to seven million barrels of oil per day, roughly 5 percent of global demand and about a quarter of the volume historically exported through the Strait of Hormuz. Investigations have traced the drone strikes to militia groups operating from within Iraq, containing strong Iranian influence. The Iraqi government, which maintains close ties with Saudi Arabia, confirmed the origin of the drones and announced the dismissal of the military commander overseeing counter-militia efforts in its southern Maysan province. Despite condemning the attacks, Saudi Arabia has refrained from retaliatory military action at Baghdad’s request.

Meanwhile, the internationally recognized Yemeni government has initiated a counter-offensive targeting Houthi positions near the Red Sea port of Mocha as the conflict escalates in the region. Saudi Crown Prince Mohammed bin Salman has urged then-U.S. President Donald Trump to consider military intervention against the Houthis. However, Trump, speaking upon his arrival in Dublin, downplayed the threat, stating the Houthi offensive would resolve itself without U.S. involvement. He indicated Houthi leaders had reached out to express their lack of desire to engage in hostilities with the United States and expressed confidence that Saudi Arabia would manage the situation. Trump also reiterated his expectation that the Iran conflict would conclude soon, leading to lower oil prices.

The developments underscore the growing volatility in a vital corridor for global energy supply, with geopolitical tensions and proxy conflicts continuing to jeopardize stability in the Red Sea and broader Gulf regions.