Saudi Arabia Restores Bombed East-west Pipeline... Resumes Crude Exports via Red Sea

Brent Crude Settles Around $105 per Barrel

Gains Narrow After Pipeline Resumption

Reuters Yonhap News

Saudi Arabia has completed repairs on the East-west Pipeline, which had been shut down following drone attacks by Iran-aligned militant groups, and has resumed crude oil exports via the Red Sea. With international oil prices recently surging due to renewed concerns about potential clashes between the United States and Iran, attention is focused on whether this development will help stabilize the market.

The Wall Street Journal (WSJ) reported on the 28th (local time) that Saudi state-run oil company Aramco completed repairs on the East-west Pipeline the previous day, enabling shipments to resume from Yanbu port on the Red Sea coast. It is reported that, as of now, approximately 3.5 million barrels of crude oil are being transported through the pipeline each day. The maximum capacity of the East-west Pipeline is reportedly 7 million barrels per day.

Previously, the operation of the East-west Pipeline was suspended on the 10th of this month following a drone attack attributed to pro-Iranian factions in Iraq. Before the Iran-Iraq War, about 920,000 barrels were transported daily through the pipeline, but after the war, it emerged as a key alternative route to the Strait of Hormuz, resulting in a surge in throughput to over 4 million barrels per day.

The resumption of the East-west Pipeline is expected to largely allay concerns about shrinking oil supplies. The WSJ pointed out, "This will deal a major blow to Iran's efforts to use control of the Strait of Hormuz as a bargaining chip to influence oil prices." Following the news of the pipeline's resumption on the 28th, international oil prices gave up some of their gains. That day, Brent crude, which had exceeded $106 per barrel intraday, settled at $105.28 per barrel, up 0.92% from the previous session.

In the oil market, there is a view that future price stability depends on whether Saudi Arabia can continue to maintain export volumes through both the Strait of Hormuz and the Red Sea. Hamad Hussein, Chief Economist at Capital Economics, told the WSJ, "The key variable the market is watching for oil prices is whether Saudi Arabia can maintain high shipment volumes through the Strait of Hormuz while also normalizing exports from the Red Sea. If exports are sustained on both fronts, it will put downward pressure on global oil prices and support stabilization. However, moves by Yemen's Houthi rebels remain a variable."

This content was produced with the assistance of AI translation services.