Full Breakdown
Saudi Arabia Restarts East-West Pipeline, Easing Oil Price Pressures
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Core Event
Saudi Arabia’s 1,200-kilometre East-West pipeline, a key bypass for crude shipments around the Strait of Hormuz, has resumed operations after repairs following a drone attack earlier this month. The restart allowed Saudi Aramco to begin loading crude at the Red Sea port of Yanbu again, prompting Brent crude to retreat from its recent peak above $108 a barrel to around $105.28, and later to $102.59. U.S. West Texas Intermediate futures fell by roughly 3.5% to $89.38.
Background & Context
The pipeline, which can transport up to 7 million barrels per day (bpd), became critical after the U.S.–Iran conflict closed the Hormuz strait, forcing Saudi exports onto the Red Sea route. The drone strike on the pipeline halted about 4 million bpd—roughly 4 % of global oil supply—and forced a shift to tanker shipments through Hormuz. The disruption heightened concerns about supply shortages and contributed to earlier price spikes.
Data & Statistics
- Restored flow through the pipeline is estimated at 3.5 million bpd, roughly half its maximum capacity.
- Kpler data shows oil transiting the Strait of Hormuz at a seven-day average of 13.2 million bpd, about 77 % of the pre-conflict level of 17 million bpd.
- Ras Tanura crude loadings have risen to 6.5 million bpd, up from 1.5 million bpd in early September.
- Brent settled at $102.59 per barrel after the restart; WTI settled at $89.38 per barrel.
Official Statements & Responses
Saudi Aramco confirmed the resumption of crude loading at Yanbu, describing the repair work as complete. U.S. and Iranian officials have resumed mediated talks aimed at ending the seven-month conflict, while President Donald Trump rejected Iran’s proposal to reopen Hormuz within a week unless U.S. conditions are met. The U.S. military continues to escort tankers through the Gulf and maintain a blockade on Iranian oil exports.
Why It Matters
The pipeline’s return to service reduces reliance on the Hormuz corridor, helping to stabilize global oil markets after a period of volatility. Analysts note that combined exports through both the Red Sea and Hormuz routes could exert downward pressure on prices. Nonetheless, ongoing threats from Yemen’s pro-Iran Houthi rebels to Gulf energy infrastructure remain a risk that could reignite price concerns.