Saudi Arabia Restarts East–West Oil Pipeline — OilPrice

Saudi Arabia has restarted the East–West oil pipeline, which transports crude to the Red Sea port of Yanbu, bypassing the Strait of Hormuz. The pipeline is currently operating at low capacity, while Saudi Aramco aims to gradually restore throughput to about 4 million barrels per day.

Resumption of supplies to Yanbu

As OilPrice reports, the full restoration of the route may take several more weeks. One cargo of oil was scheduled to be loaded in Yanbu for China on Tuesday.

Before the shutdown, the pipeline transported around 4 million barrels of oil per day across the kingdom to the Red Sea. Earlier this month, its operation was halted after drone attacks. Following the shutdown, Saudi Aramco redirected more oil to the Persian Gulf, selling tens of millions of barrels for shipment through the Strait of Hormuz and ship-to-ship transfers near Oman.

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Oil market reaction

On Tuesday, Brent temporarily fell by more than $2 per barrel, to about $98, its lowest level in two weeks. WTI dropped below $92 per barrel, before quotations recovered somewhat later. OilPrice notes that the route's restart coincided with an Iranian proposal to open the Strait of Hormuz within seven days if the United States eases military pressure and the blockade of Iranian ports.

The pipeline shutdown also disrupted supplies that normally moved from Yanbu through Egypt's SUMED system to the Mediterranean Sea. According to Reuters sources, traders are already moving tankers to Egypt's Port Said and Sidi Kerir for ship-to-ship oil transfers as Saudi flows resume. At the same time, pipeline throughput remains below normal levels, tanker traffic through the Strait of Hormuz is limited, and the diesel market is under pressure due to disruptions at oil refineries in Russia and the Middle East.