Saudi Pipeline Restart Sparks Global Oil Price Drop

Saudi Arabia has restarted operations at its East-West Pipeline and is set to resume exports from the Red Sea port of Yanbu, according to three sources briefed on the matter. The pipeline's resumption comes as signs mount of an increase in Middle Eastern oil flows.

The pipeline was forced to shut down after drone attacks on September 11, halting crude loadings at Yanbu port. Saudi Arabia has been using the pipeline to reroute around 4 million barrels per day - roughly 4% of global supply - since the US-Israeli war disrupted oil flows through the Strait of Hormuz.

Aramco is seeking to get the pumping rate back to 4 million bpd, with a full restart expected to take 6-8 weeks. The pipeline has a capacity of 7 million bpd and was damaged in three pumping stations during the drone attack. A security source stated that reaching 40% of capacity would take just a couple of days.

The resumption of supplies on Tuesday helped drive selling on global oil markets, with Brent crude falling by over $2 a barrel to around $97 - its lowest since September 8.