Saudi Arabia Restarts East-West Pipeline Amid Oil Market Volatility
Saudi Arabia has restarted operations at its East-West Pipeline and could resume exports from the Red Sea port of Yanbu later on Tuesday, according to three sources briefed on the matter.
The resumption of supplies helped drive selling on global oil markets, with global oil benchmark Brent crude falling by more than $2 a barrel towards $97, its lowest since September 8.
The pipeline was forced to shut down after drone attacks on September 11, which Saudi Arabia has blamed on Iraqi militia. The kingdom had been using the pipeline to reroute around 4 million barrels per day, about 4% of global supply, to Yanbu, a process that began after the U.S.-Israeli war on Iran disrupted oil flows through the Strait of Hormuz.
The pipeline's capacity is 7 million bpd, and Aramco was seeking to get the pumping rate back to this level. However, reaching a rate of 40% of capacity will take a couple of days, while a full restart could take 6-8 weeks, according to a security source.