Saudi Pipeline Restart Triggers Global Oil Price Decline
Saudi Arabia has restarted operations at its East-West Pipeline and is considering resuming exports from the Red Sea port of Yanbu. The pipeline, which was shut down on September 11 after a drone attack, is currently pumping at a low rate but is expected to reach full capacity within six to eight weeks.
The East-West Pipeline has been used to reroute around 4 million barrels per day (around 4% of global supply) since the U.S.-Israeli war on Iran disrupted oil flows through the Strait of Hormuz. The pipeline's capacity is 7 million bpd, and it will resume crude supply to Aramco refineries located on the Red Sea coast.
The restart of the East-West Pipeline has driven selling on global oil markets, with Brent crude falling by more than $2 a barrel towards $97, its lowest since September 8. Traders are preparing for increased Saudi oil exports through ship-to-ship transfers at Egypt's Mediterranean Port Said and Sidi Kerir.