Saudi Pipeline Damage Could Bypass Strait of Hormuz

Three oil pumping stations along Saudi Arabia's East-West pipeline may have been damaged in an attack on September 10, potentially allowing oil exports to bypass the Strait of Hormuz. The damage was reported by OilPrice, citing Reuters and satellite images from MizarVision that show significant fire marks and structural damage near the stations.

The pipeline transports between 4 million and 5 million barrels of oil per day, roughly 4-5% of global supplies. Before the attack, its total capacity was approximately 7 million barrels per day, with about 2 million barrels supplied to refineries. Saudi Aramco aims to restore around half of the route's capacity within days by bypassing damaged infrastructure.

However, full restoration of the system's operations could take around six weeks, according to Bloomberg. The pipeline shutdown has led to an increase in oil prices, with Brent rising to approximately $108 per barrel at the start of the week. Saxo Bank commodity strategist Ole Hansen believes that Brent near $110 indicates market tightness.