Oil Market Tightness Endures Despite Saudi Pipeline Restart

The recent restart of Saudi Aramco's East-West pipeline has provided some relief to oil market bears, but industry watchers are still grappling with how much crude Saudi Arabia can export while several pumping stations remain under repair.

However, the resumption of pipeline flows has not alleviated persistent tightness in the oil market, as evidenced by soaring freight and diesel prices. The cost of transporting oil by ship has exploded, with VLCC tankers now fetching a staggering $1.2 million per day for a Gulf-to-China route.

French oil giant TotalEnergies paid a record-breaking $75 million to charter the Kuwait Prosperity tanker last week, while similar offers have jumped closer to $100 million this week.