HeadlinesBriefing favicon HeadlinesBriefing.com

Saudi Arabia Restores Key Oil Pipeline Exports After Repairs

Bloomberg Markets •
×

Saudi Arabia has started exporting oil using a key cross-country pipeline after it was repaired following drone strikes earlier this month. Flows through the line have reached about 3.5 million barrels a day, according to a person with direct knowledge of the matter. The pipeline has a total capacity of about 7 million barrels a day, with about 5 million typically earmarked for exports.

Aramco and the Saudi energy ministry did not immediately respond to requests for comment. The resumption will restore Saudi Arabia’s access to an alternative export route used during the Iran war, even as the kingdom has ramped up shipments through the Strait of Hormuz this month. Traders will be watching how much oil Saudi Arabia keeps pushing out through Hormuz when the East-West pipeline returns to full capacity.

A person familiar with the matter said earlier this month that a full resumption could take about six weeks. The Persian Gulf route remains fraught with risk as ships occasionally come under attack amid the ongoing Iran war. At the same time, the Red Sea route along Saudi Arabia’s western border has faced threats from Yemen’s Houthi militants, who have targeted energy infrastructure and the Red Sea port of Yanbu, where the East-West line terminates.

Saudi Arabia has issued multiple warnings for cities including Riyadh, Jazan, and Mecca. Of the pipeline’s 7 million barrels a day capacity, about 2 million generally goes to refineries along the west coast, with the remainder available for exports. Those overseas shipments had been a lifeline for the market during the Iran war, helping keep oil-price surges in check.

Oil in London was trading near $107 a barrel on Monday, driven higher as Iran and the US appear far apart on a deal to end the conflict.