Developing Asian nations face a $7 billion gas bill as the U.S.-Iran war takes a fifth of global LNG (liquefied natural gas) supply offline.
Saudi Arabia shut its East-West pipeline on Sunday, Sept. 13 after drone hits, closing the bypass route that moved Saudi oil to the Red Sea around the Strait of Hormuz during the U.S.-Iran war. Oil rose more than $3 a barrel after the shutdown and fresh strikes near Hormuz, Reuters reported.
The outage puts roughly 4% of world oil supply at risk. Diesel hit a record as refiners run near their limits; Bloomberg put the LNG lost to the war at a fifth of world supply.
Catch up
- Sept. 3 — U.S. drones hit two Iranian tankers under a "tanker for tanker" policy while the Navy escorted a 40-ship convoy through Hormuz, after two Filipino sailors were killed on the Saudi tanker Sidr.
- Sept. 13 — Drones launched from Iraq hit the Saudi East-West line, forcing its closure.
3 earlier issues
BackgroundWhat the East-West shutdown takes offline
- East-West line normally moves 5 million barrels a day and can surge to 7 million; oil through Hormuz ran 21 million barrels a day in early 2026 (Kpler).
- U.S. distillate (diesel-type fuel) stocks are forecast below 100 million barrels and below the 2021-2025 five-year range through 2026 and most of 2027 (EIA); the week ending Sept. 4 held 28.6 days of supply.
- U.S. diesel refining margin (the gap between oil cost and diesel price) hit a record $108.02 a barrel intraday, about $2.57 a gallon; EIA expects it above $2 a gallon from August through November.
Currently showing U.S. average retail diesel price
U.S. average retail diesel price