Saudi Pipeline Restart Sparks Crude Price Decline Amid Hormuz Tensions

Saudi Arabia has restarted operations along its East-West pipeline, which allows oil transport while bypassing the Strait of Hormuz. The operational restart triggered a decline in global crude prices as expectations grew for restored energy supplies.

The East-West pipeline was rendered inactive following a drone attack on September 11 targeting associated infrastructure. Riyadh asserted that the attacking drones originated from Iraqi territory, holding Iran-backed armed groups responsible. Tehran denied any involvement in the attack.

The pipeline connects oil fields in eastern Saudi Arabia directly to the Yanbu terminal on the Red Sea, stretching approximately 1,200 kilometers. Since major disruptions to tanker traffic in the Strait of Hormuz erupted during the U.S.-Israel military conflict with the Islamic Republic, Saudi Arabia has routed around four million barrels per day (bpd), representing nearly four percent of global oil supply, through this alternative land bridge.

Brent crude prices fell by over two dollars on Tuesday, briefly dipping to around $97 per barrel, their lowest point since September 8. The initial shipment following the reopening was scheduled for loading at Yanbu, bound for China.