Oil markets are in turmoil amid renewed tensions in the Middle East. Prices have risen past US$100 (A$140) a barrel for the first time since May.

The biggest trigger is the bombing of Saudi Arabia’s crucial East-West pipeline. The pipeline acted as a release valve for Saudi exports blocked from passing through the Strait of Hormuz.

Fuel prices are spiking. Unrest has quickly followed, with riots and protests from Syria to Portugal to Guatemala. Global oil stocks have fallen by 507 million barrels since the US-Iran war broke out in February as nations eat into their reserves.

But prices could have been a lot higher if it wasn’t for China. Demand in the world’s largest oil-consuming nation is set to fall for the third successive year. Earlier stockpiling and a rapid shift to electric vehicles are responsible.

Fewer routes for Gulf oil

The year’s first fuel crisis came after Iran blocked the vital Strait of Hormuz, disrupting shipments from nations such as Kuwait, Saudi Arabia and Qatar.

The new crisis may be different because it affects Saudi Arabia’s most important alternative export route – the 1,200km pipeline linking eastern oilfields to the Red Sea. It was built in the 1980s as a way to bypass Hormuz.

A series of drone strikes from September 10–11 damaged pumping stations, forcing the Saudi oil company, Aramco, to shut the........

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