Saudi Pipeline Restart Brings Relief, But Fuel Prices May Take Weeks to Fall

A Saudi oil pipeline that was damaged in an attack earlier this month has been restarted, bringing some relief to motorists around the world.

The East-West oil pipeline, which is approximately 1,200km long, transports oil across Saudi Arabia to the Red Sea. This route provides a crucial alternative to the Strait of Hormuz, a shipping chokepoint that has been at the center of global oil market uncertainty.

Before the attack, Saudi Arabia was rerouting about four million barrels per day through the pipeline, which is equivalent to around four percent of global oil supply. The restart of this pipeline has helped ease fears of a shortage and led to a decrease in global oil prices by over $2 a barrel at one point on Tuesday.

Energy experts say that lower global oil prices could eventually lead to cheaper petrol and diesel in Australia, but it may take several weeks for these savings to be reflected at the bowser. Dr Lurion De Mello, an energy economist from Macquarie University, noted that while the restart of the pipeline is good news for motorists, it doesn't solve the underlying supply problem.