Saudi East-West Pipeline Reopens After Drone Attack

Saudi Arabia has restarted its East-West oil pipeline after a drone attack on September 11 forced the kingdom to shut it down, halting crude loadings at the Red Sea port of Yanbu. The resumption of supplies helped drive selling on global oil markets, with Brent crude falling by more than $2/bbl towards $97.

The pipeline was initially pumping at a low rate after its restart and is expected to reach 40% of capacity within a couple of days. A full restart will take up to six to eight weeks, according to sources. The damage from the drone attack forced Saudi Aramco to seek a reroute for around 4 MMbpd of oil, which was previously sent through the Strait of Hormuz.

The pipeline has a capacity of 7 MMbpd and three pumping stations serving it were damaged in the attack. Oil traders are preparing for increased exports from Saudi Arabia by moving tankers to Egypt's Mediterranean Port Said for ship-to-ship transfers. A cargo is scheduled to load at Yanbu later on Tuesday, bound for China.