Saudi East-West Pipeline Restart Sends Oil Prices into Reverse

Saudi Arabia has restarted its East-West oil pipeline after a temporary shutdown, restoring flow to at least some of the 4-million-barrel-per-day route. The pipeline is currently running at a low rate, with Aramco working to return flows to around 4 million bpd. A full restart could take weeks, but oil traders are already reacting to the development.

Crude oil prices saw a temporary dip of more than $2 per barrel on Tuesday, with Brent trading at a two-week low of around $98 and WTI dropping below $92. However, prices began rebounding slightly later in the morning. The Saudi restart has landed alongside an Iranian proposal to reopen the Strait of Hormuz within seven days if the US begins easing military pressure and its blockade of Iranian ports.

The East-West pipeline had been rerouting about 4 million bpd across Saudi Arabia to Yanbu before drone attacks forced its shutdown earlier this month. Without it, Aramco pushed more crude back toward the Persian Gulf, selling tens of millions of barrels for movement through Hormuz and ship-to-ship transfers near Oman.