Saudi East-West Pipeline Restores Over 80% Capacity, Weighing on Oil Prices

The East-West Pipeline in Saudi Arabia has reached an impressive 86% of its maximum capacity after a rapid increase in throughput. The pipeline, which bypasses the Strait of Hormuz, now transports around 4.5 million barrels per day of crude to Red Sea ports for export.

This significant improvement in oil supply has put downward pressure on international oil prices. The release of fuel reserves by the Group of Seven (G7) also contributed to the decline in prices.

The G7 announced that they would release 100 million barrels of crude and diesel reserves under the coordination of the International Energy Agency (IEA). This move has led to a decline in West Texas Intermediate (WTI) crude futures by 1.9% to $91.11 per barrel, while Brent Crude futures slipped 0.06% to $102.25 per barrel.

Despite this positive development, traders remain cautious due to the risk of potential escalation in Middle East hostilities. The United States has deployed a third carrier strike group and approximately 9,000 to 10,000 additional personnel to the region, which could lead to further supply disruptions.