Saudi Arabia has shut down its critical East-West oil pipeline, a vital artery for crude oil exports, following a drone attack that originated from neighboring Iraq. The incident, which occurred on Friday, has raised concerns about the security of global energy supplies amidst escalating regional tensions.

The 1,200km (745 mile) pipeline is strategically important as it allows Saudi Arabia, the world's largest crude oil exporter, to transport oil without passing through the Strait of Hormuz. This shutdown diverts approximately 4% to 5% of global oil supply, according to reports citing ship tracking companies and analysts.

Satellite images have emerged showing signs of damage and smoke near the pipeline's affected sites. Saudi Arabia's foreign ministry confirmed that the attack resulted in some injuries and damage, the full extent of which is still being assessed. The kingdom has stated it will not retaliate at this stage, following a request from Iraq's prime minister.

The implications of this attack are significant, potentially leading to increased volatility in global oil prices. The incident occurs as the US-Iran war continues into its seventh month and amid a major advance by Houthi rebels in Yemen, which has put additional pressure on international shipping routes.

In response to the confirmed drone launch from its territory, Iraq announced it had fired a military commander and launched an investigation. The operations commander in Maysan governorate, a province bordering Iran, was removed from his post. Baghdad has pledged to work with Riyadh to prevent future attacks launched from Iraqi soil against neighboring nations.

The Gulf Co-operation Council, comprising the UAE, Bahrain, Oman, Qatar, and Kuwait, issued a statement condemning the attack. Secretary General Jasem Mohamed Albudaiwi described it as a dangerous escalation and an unacceptable threat to Saudi Arabia's security and territorial integrity.

Simultaneously, Houthi militants in Yemen have made significant territorial gains, reportedly seizing control of much of the country's coastline, including the Bab al-Mandab Strait, a key gateway to the Red Sea and the Suez Canal. While the Houthis claim maritime navigation remains safe for all except Saudi vessels, these developments further destabilize the region.

The combined pressures of the pipeline attack and the conflict in Yemen have contributed to a rise in crude oil prices, exceeding $100 a barrel for the first time since July. Saudi Arabia has affirmed its right to take all necessary measures to protect its sovereignty, security, and facilities.