Saudi Arabia shuts key oil pipeline after drone attack

Saudi Arabia shut its East-West oil pipeline on Friday after it was hit in a drone attack, disrupting a key route used to bypass shipping problems in the Strait of Hormuz.

The Saudi Energy Ministry said the 1,200-kilometre pipeline was closed as a precaution following attacks in the Riyadh and Medina regions.

The pipeline has been carrying between four million and five million barrels of oil a day in recent months, equivalent to around four to five per cent of global supply.

Saudi authorities said there were injuries and damage following the attack, although the impact on oil exports has not yet been confirmed.

Saudi Arabia and Iraq said the drone involved originated from Iraqi territory, although it remains unclear who was responsible.

Iraq dismissed a military commander in Maysan province on Saturday and ordered a security operation to identify those behind the attack. The province borders Iran and is home to Iran-backed armed groups.

Saudi Arabia said it had so far refrained from retaliating following a request from the Iraqi prime minister, but reserved the right to take measures to protect its interests.

The shutdown adds to pressure on global energy supplies as tanker traffic through the Strait of Hormuz remains severely disrupted.

In a separate development, Yemeni government sources told Reuters that Houthi forces had seized the strategic island of Perim at the entrance to the Red Sea's Bab el-Mandeb Strait.

Disruption on both sides of the Arabian Peninsula has contributed to global oil prices rising back above $100 a barrel.