Saudi Arabia Restarts East-West Oil Pipeline Amid Global Supply Crunch

Saudi Arabia is restarting its East-West oil pipeline after it was shut down earlier this month. The pipeline outage has tightened crude supplies and disrupted Saudi exports, pushing European benchmark oil prices above $130 at one point.

The kingdom aims to restore flows via Yanbu later this week and seek to return the pipeline to full capacity in about six weeks. Aramco is bypassing damaged infrastructure to facilitate restoration of flows.

Since the pipeline was hit by drones, state-run Saudi Aramco had been racing to bypass a damaged pumping station along the route to help restore partial flows. The resumption of the East-West line will allow Aramco to pick up exports again from the Red Sea port of Yanbu, which it has been using during the war for the bulk of its shipments.

The impact of the pipeline's closure has rippled through markets, with Saudi Aramco telling at least two European refiners that they won't be allocated any crude in October under long-term agreements. Poland's Orlen SA has already been hunting for replacements, helping drive up prices of European oil grades.