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The Strait of Hormuz has been blocked for several weeks, disrupting one of the main axes of the world’s oil trade. To maintain its exports, Saudi Arabia pushed its east-west pipeline to full capacity. This technical response is not enough to compensate for the chaos in the market. The rapid rise in oil prices exposes the structural fragility of global supply amid rising geopolitical tensions.
In short
- The long-term blockade of the Strait of Hormuz disrupts the main axis of world oil trade.
- Saudi Arabia activates its east-west gas pipeline to full capacity to maintain its exports.
- This solution redirects some of the oil, but does not fully compensate for the lost volumes.
- The market remains tense, with oil prices rising rapidly amid uncertainty.
Saudi gas pipeline reached its limits
Saudi Arabia activated its east-west pipeline to full capacity, reaching 7 million barrels per day, to bypass the closure of the Strait of Hormuz. Indeed, Saudi Aramco’s CEO, Amin Nasser, said on March 10 that the pipeline would reach full capacity within days.
This 1,200-kilometer-long infrastructure connects the Abqaiq oil fields with the Red Sea port of Yanbu. Faced with a paralyzed maritime corridor, Riyadh relies on this land route to preserve oil exports and limit the impact on the global market.
The Strait of Hormuz, a strategic passage for energy trade, is experiencing a 90-95% collapse in traffic, while it normally accounts for nearly 20% of global supply. In this context, the pipeline becomes a direct alternative, redirecting part of the oil flows to the west of the country.
This emergency configuration reveals the central role of this infrastructure in Saudi Arabia’s energy strategy.
- Pipeline capacity was increased to 7 million barrels per day;
- Traffic in the Strait of Hormuz has dropped by 90 to 95%;
- This area represents about 20% of the global supply;
- Flow distribution: 2 million barrels per day for domestic consumption and 5 million barrels per day for export via Yanbu.
The energy crisis is already visible in the markets
Disruption of supply is immediately reflected in prices. WTI crude is nearing $100, up about 40% in one month, while Brent is hovering between $105 and $112 and Dubai crude is around $126.
In the face of these tensions, the authorities released nearly 400 million barrels from the strategic reserves, an unprecedented level. Despite this massive intervention, analysts are talking about a scenario where oil prices could climb between $150 and $200 if the situation persists.
The origins of this crisis go back to the United States and Israel strikes on Iranian facilities, followed by Tehran’s closure of the Strait. This military escalation turns a strategic passage into a geopolitical lever with immediate effects on the global economy. The use of alternative infrastructures such as the Saudi pipeline shows its limits in the face of such a large shock.
Thus, Bitcoin operates in a tense macroeconomic context, where energy shocks and inflation reinforce its role as an alternative asset amid uncertainty in traditional markets.
In the long term, this situation could accelerate the reconfiguration of energy routes and increase investment in bypass solutions to limit the surge in oil prices. It also feeds an atmosphere of uncertainty in financial markets, where energy acts as a catalyst for inflation and volatility. In this environment, the economic balance could be permanently redefined, with an indirect impact on all asset classes, including the crypto market.
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A graduate of Sciences Po Toulouse and holder of the blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I committed myself to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and take advantage of the opportunities it offers. I strive every day to provide an objective analysis of current events, decipher market trends, convey the latest technological innovations, and put into perspective the economic and social issues of this ongoing revolution.
DISCLAIMER OF LIABILITY
The views, thoughts and opinions expressed in this article are solely those of the author and should not be taken as investment advice. Before making any investment decision, do your own research.
