SINGAPORE/NEW DELHI: Saudi Arabia has restarted its East-West oil pipeline and could resume crude exports from the Red Sea port of Yanbu later on Tuesday, Reuters reported, citing three sources briefed on the matter.
Drone attacks forced the kingdom to shut the pipeline on September 13, bringing crude loadings at Yanbu to a halt.
Since disruption affected oil shipments through the Strait of Hormuz following the US-Israeli war with Iran, Saudi Arabia had used the East-West Pipeline to reroute around four million barrels per day to Yanbu. That volume represents roughly 4% of global oil supply.
Pipeline Initially Restarts at Reduced Pumping Rate
Two sources said the pipeline was operating at a low rate following its restart. However, Saudi Aramco was seeking to restore flows to around four million barrels per day, according to another source.
A security source cautioned that fully restoring operations could take several weeks. Saudi Aramco did not immediately respond to Reuters’ request for comment.
Meanwhile, the pipeline will again supply Aramco refineries along Saudi Arabia’s Red Sea coast.
One source said a crude cargo scheduled to load at Yanbu later on Tuesday would head to China.
Oil Prices Fall as Supply Concerns Ease
The restart immediately affected global oil markets, with traders saying expectations of renewed Saudi supplies encouraged selling. Brent crude futures dropped by more than $2 a barrel, reaching their lowest level since September 8.
Furthermore, traders have begun preparing for renewed Saudi crude shipments. Two trading sources said tankers were moving towards Egypt’s Mediterranean port of Port Said for ship-to-ship transfers and towards Sidi Kerir.
The East-West Pipeline has become particularly important because it allows Saudi Arabia to bypass the Strait of Hormuz and move substantial crude volumes directly towards Red Sea export facilities.
