Saudi Arabia Restarts Key East-West Oil Pipeline, Yanbu Exports Set to Resume

Saudi Arabia has restarted operations on its strategic East-West oil pipeline, with crude oil exports from the Red Sea port of Yanbu expected to resume as early as Tuesday, according to three sources familiar with the matter.

The pipeline was shut down on September 13 following a drone attack, forcing Saudi Arabia to halt crude oil loading operations at Yanbu.

According to Reuters, news of the pipeline's restart increased selling pressure in global oil markets on Tuesday. Brent crude futures fell by more than $2 per barrel, reaching their lowest level since September 8, traders said.

Following disruptions to oil shipments through the Strait of Hormuz amid the U.S.-Israel conflict with Iran, Saudi Arabia—one of the world's largest oil exporters—has relied heavily on the East-West pipeline to transport approximately 4 million barrels of crude oil per day to Yanbu. The volume accounts for roughly 4 percent of global oil supply.

Two sources said the pipeline initially resumed operations at a reduced capacity. One of them added that state-owned Saudi Aramco is working to increase throughput to its full capacity of 4 million barrels per day, although no timeline has been provided for reaching that target.

Saudi Aramco did not immediately respond to a request for comment.

One source said the restored pipeline will once again supply crude oil to Saudi Aramco's refineries located along the Red Sea coast.

A crude oil cargo is scheduled to be loaded at Yanbu on Tuesday and shipped to China, the source added.

Meanwhile, two additional trading sources said oil traders have begun positioning tankers at Egypt's Mediterranean port of Port Said in anticipation of renewed Saudi crude exports.

The tankers are expected to facilitate ship-to-ship crude transfers, while additional vessels are also being dispatched to the nearby port of Sidi Kerir as export operations gradually return to normal.