Iran-backed proxies strike Saudi oil pipeline, gain Red Sea territory

Iran-backed proxies in Iraq and Yemen have launched significant strikes on vital Saudi Arabian infrastructure, including the country’s most crucial oil pipeline, military bases, and energy facilities. These attacks have also allowed them to gain strategic territory along the Red Sea. The developments are part of escalating tensions in the region that have impacted Saudi Arabia’s oil export capabilities, specifically affecting the East-West oil pipeline, which is a key conduit for bypassing the Strait of Hormuz. The pipeline’s closure has heightened concerns about the timeline for a restart, with repairs reportedly underway but facing challenges due to the extent of the damage. Key Takeaways Market pricing suggests a decreased likelihood of the Saudi oil pipeline restarting by September 22, with current odds at 14.5% YES, down from 24% a day ago. The attacks appear to have significantly impacted the September 30 market, where the probability of a restart has dropped to 40.5% from 60% over the past 24 hours. Despite the setbacks, the October 31 market reflects a more optimistic outlook, with a 78% YES probability, suggesting market participants anticipate a resolution by then. What t...