A route carrying about 4% of the world's oil supply has reopened. Saudi Arabia's East-West pipeline, which serves as an alternative to the blockaded Strait of Hormuz, resumed operations 11 days after a drone attack shut it down.
Saudi Arabia has restarted the East-West pipeline, Reuters reported on the 22nd. Crude exports from the Red Sea port of Yanbu were expected to be possible later that day. The East-West pipeline is a key alternative crude transport route inside Saudi Arabia, the world's largest oil exporter. Running about 1,200 kilometers across the Arabian Peninsula to the Red Sea, it can carry up to 7 million barrels of crude a day.
Saudi Arabia had been diverting about 4 million barrels a day through the pipeline to Yanbu after U.S. and Israeli strikes on Iran disrupted oil shipments through the Strait of Hormuz. But the drone attack on the 11th halted operations, also stopping crude loadings at Yanbu.
News of the supply restart pushed oil prices lower. Brent crude futures fell more than $2 a barrel to their lowest level since Sept. 8, according to traders. Normalization, however, may take time. One source said state oil company Saudi Aramco aims to restore volumes to 4 million barrels a day, but added that a full restart could take weeks. The Associated Press also reported that it would take several weeks for the pipeline to return to operation.
The pipeline will also resume supplying crude to Aramco's refinery on the Red Sea coast. One source said a single cargo was scheduled to load at Yanbu later the same day, bound for China. Reuters reported that traders are moving tankers to Port Said and Sidi Kerir on Egypt's Mediterranean coast for ship-to-ship transfers in preparation for Saudi crude shipments.
