Saudi East-West pipeline back at 5.8 million barrels daily

Summary

• Saudi Arabia is pumping 5.8 million barrels a day through its East-West pipeline, the energy minister said.
• The line was shut Sept. 10 after drone attacks launched from Iraq, halting a key non-Hormuz export route.
• Its restart eases pressure on oil prices and reduces Saudi reliance on the Strait of Hormuz.

The latest

Saudi Arabia is moving 5.8 million barrels a day through its cross-country East-West pipeline, Energy Minister Prince Abdulaziz bin Salman said Tuesday at an event in Bahrain. He said the kingdom was able to resume using the link five to six days after the strike that knocked it out last month. The line had been shut since Sept. 10.

Details

• The figure: The minister put current flows at 5.8 million barrels a day as of Tuesday morning. The East-West line runs from the kingdom's eastern oil fields to the Red Sea coast, allowing crude to reach buyers without transiting the Strait of Hormuz, the chokepoint at the mouth of the Gulf.
• The recovery: The minister said the kingdom restored use of the link within five to six days of what he called the "big hit" on the pipeline. He did not detail the scope of repair work or whether any sections remain below normal operating condition.
• Aramco's ramp-up: State-run Saudi Aramco had pushed flows close to 6 million barrels a day, or more than 80% of the line's capacity, a person familiar with the matter said late last week. About 4.5 million barrels of that was available for export through Yanbu, the kingdom's western port on the Red Sea.
• The attack: The pipeline was shut on Sept. 10 following attacks by drones launched from Iraq. The launch sites were identified only by country, with no group named as responsible for the strike and no public assessment of the damage inflicted.
• Wartime role: The strike halted a conduit that had kept Saudi oil flowing throughout the Iran war without routing cargoes through Hormuz. Those barrels had become a lifeline for the market, helping keep crude prices from climbing further at a point when supply routes were under strain.
• Red Sea risk: The western route has come under pressure in recent months, with Yemen's Houthi militants attacking tankers and Saudi infrastructure along the kingdom's west coast. That exposure limits how much of a safe alternative Yanbu offers while the eastern corridor remains contested.
• The pivot: With the East-West line down, Saudi Arabia shifted its crude exports back toward Hormuz, the route it had spent the war trying to avoid. The pipeline's return gives Riyadh a second outlet again and splits its export exposure between two separate waterways.
• Export record: Hormuz shipments combined with returning volumes through Yanbu drove the kingdom's total exports last month to their highest level since January. The breakdown between the two routes for that month has not been published.

Background

The East-West pipeline carries crude from Saudi Arabia's eastern producing region to Yanbu on the Red Sea. It exists so the kingdom can export without depending on the Strait of Hormuz, through which a large share of global seaborne oil passes.

Between the lines

Both of Saudi Arabia's export corridors are now exposed. Hormuz sits beside Iran, and the Red Sea route has drawn Houthi attacks on tankers and coastal infrastructure. A pipeline reachable by drones launched from Iraq adds a third vulnerability inland. Restoring 5.8 million barrels a day restores volume, not security, and the record export month shows demand for the barrels is not the constraint.

What's next

Watch for Aramco confirmation of whether flows return to full capacity, the monthly export split between Yanbu and Hormuz, and any further drone or Houthi strikes on the line or Red Sea shipping.

Source: Bloomberg