Saudi Pipeline Restart Sparks Oil Price Drop

Saudi Arabia has restarted its East-West Pipeline and is preparing to resume crude exports from the Red Sea port of Yanbu, according to sources briefed on the matter. The pipeline had been offline since September 11, when drone attacks forced the kingdom to halt operations.

The damage caused by the drone attacks was significant, with three pumping stations affected, but Saudi state oil company Aramco is aiming to bring the line back up to its earlier throughput of about 4 million barrels per day. The pipeline has a total capacity of 7 million barrels per day and currently pumps at around 40% of that rate.

While some industry sources estimate it will take six to eight weeks for the pipeline to reach full pumping rates, others believe it could happen in as little as two days. Traders are already anticipating the resumption of Saudi loadings and have begun moving tankers toward Egypt's Mediterranean Port Said for ship-to-ship transfers.