Saudi Arabia Resumes Crude Oil Exports from Yanbu After Pipeline Repair

Saudi Arabia has resumed overseas crude oil shipments through its East-West Pipeline, ending a 17-day export disruption from the critical Red Sea port of Yanbu, Bloomberg reported on Monday, citing people familiar with the matter.

Pipeline Operations Restored

The resumption of flows is a key development for the state-owned oil giant, Saudi Aramco. The 1,200-kilometer pipeline, known as the Petroline, is a major artery connecting oil fields in the Eastern Province with the Yanbu port, providing a strategic alternative to the Strait of Hormuz.

Operations were halted on September 11 after a drone attack, which Riyadh attributed to Iraqi militias, struck three pumping stations. Before the incident, the pipeline was transporting approximately 4 million barrels per day (bpd), or about 4% of global oil supply. While Reuters reported a low-speed restart on Sept. 22, tanker loading had not resumed as of Sept. 24 as Aramco worked to build up sufficient inventories, the agency noted.

Market Impact and Outlook

Crude oil prices reacted to the broader supply tightness, with futures rising 3.76% to $95.88 per barrel in pre-market trading Monday, according to Investing.com data. The price is approaching a technical resistance level between $95.60 and $97.73.

Ad

Despite the positive operational news, shares of Saudi Aramco (2222.SE) fell 0.77% to SAR 25.62 in Riyadh on Monday, suggesting that the market had already anticipated the pipeline's restart. According to late September estimates, a full restoration of the pipeline's theoretical 7 million bpd capacity could still require another six to eight weeks. The current operating rate has not been publicly disclosed, and neither Saudi Aramco nor the Saudi Ministry of Energy responded to Bloomberg's requests for comment.

Shifting Export Routes

During the outage, Saudi Arabia compensated for the shortfall by significantly increasing exports through the Strait of Hormuz. Citing data from Kpler, CNBC reported on Sept. 25 that Saudi crude exports via the strait were tracked at 3.6 million bpd in September, a sharp increase from approximately 900,000 bpd in August.

"The ramp-up in Middle East Gulf exports is a direct response to the pipeline outage," Matt Smith, Director of Commodity Research at Kpler, told CNBC. He added that it could also signal "growing confidence in transiting the Strait of Hormuz as more vessels make the trip."