Saudi Arabia Restarts East-West Pipeline at Low Capacity After September 11 Drone Attack

Saudi Arabia restarted its East-West Pipeline on Tuesday, September 22, resuming at least partial oil flows through the 4-million-barrel-per-day conduit that serves as the kingdom's primary bypass around the Strait of Hormuz. Drone attacks had forced a shutdown of the pipeline on September 13, halting crude loadings at the Red Sea port of Yanbu. The restart is currently running at a low rate, with Aramco working to return flows toward the full 4 million bpd capacity, a process that could still take weeks. One cargo was already scheduled to load at Yanbu on Tuesday, destined for China.

Satellite imagery from Copernicus EU showed the Saudi terminal at Ju'aymah active again, with six supertankers loading crude and an additional vessel at Ras Tanura, with at least two of those tankers different from ones photographed at the same location days earlier. The news provided temporary relief to global oil markets, with Brent crude futures falling more than $2 a barrel to their lowest level since September 8.

Despite the restart, the broader oil market remains stressed. Tanker freight costs have surged to record levels as vessels remain trapped in the Persian Gulf amid the ongoing U.S.-Iran conflict, triggering a worldwide shortage of long-haul ships. Daily earnings on VLCC tankers on the Gulf-to-China route have soared, and elevated diesel prices signal that the pipeline resumption has not resolved underlying market tightness.