A drone launched from Iraq by Iranian-backed militants recently struck Saudi Arabia's East-West oil pipeline, forcing its shutdown, the Wall Street Journal reported. The pipeline, previously a critical buffer for the global oil market, sustained damage that caused market pressure to surge. Brent crude spot prices this week soared to $132 per barrel, a significant jump from $90 at the end of August.

Against this backdrop, Saudi Arabia has been forced to re-rely on the Strait of Hormuz "relay transfer" scheme, where oil tankers navigate the strait at night under U.S. military escort, then transfer crude via ship-to-ship operations in the Gulf of Oman for export. However, this scheme is costly, incurring a risk premium of $16 to $20 per barrel of crude, with insurance costs potentially reaching up to 10% of the cargo's value, and transfer equipment supply becoming increasingly tight.