Saudi Arabia shuts down oil pipeline

Saudi Arabia has shut down its East-West pipeline, after the vital oil conduit came under aerial attack in the widening Middle East war, threatening to send energy prices even higher.

The world's largest crude oil exporter said it temporarily closed the pipeline as a precaution after a drone attack that both Baghdad and Riyadh said had originated in Iraq, where Iranian-backed militias operate.

Iraq dismissed a military commander on Saturday in response to the attack.

The 1200-km pipeline running across the Arabian Peninsula has served as the main route out for global supplies of Middle East oil for the past six months while the Strait of Hormuz has been largely shut by war.

It has been moving four million to five million barrels per day, amounting to 4.0 per cent to 5.0 per cent of global supply, sparing Saudi Arabia the brunt of the disruption that has crippled other Gulf oil and gas exporters.

Satellite images showed black smoke rising from an area of the pipeline south of Medina.

The attack resulted in some injuries and damage that was being assessed, the Saudi Foreign Ministry said without detailing the impact on exports.

US President Donald Trump, visiting Ireland to attend a golf tournament at one of his resorts, said Iran was probably to blame.

Oil prices shot up over the past week and the retail price of diesel in the United States surged past a record $US6 ($A8.4) a gallon, as the United States and Iran both fired on tankers and the Iran-aligned Houthis in Yemen advanced along the Red Sea, potentially extending disruption to another major oil route.

Washington now faces a dilemma over whether to help the Saudis fight the Houthis, risking further expansion of the war.

Saudi Arabia's de facto ruler, Crown Prince Mohammed bin Salman, phoned Trump on Thursday and asked for US military help fighting the Houthis, three sources told Reuters.

They said the prince was told that Washington would not intervene directly for now but would help with intelligence.

Trump confirmed on Saturday that he had spoken to the crown prince, and said the Houthis had also phoned his administration and asked Washington not to become directly involved in the conflict.

Four Yemeni government sources told Reuters that the Houthis had seized the strategic island of Perim on Friday in the middle of the Bab el-Mandeb Strait — the "Gate of Tears" at the mouth of the Red Sea.