Saudi Arabia restarts East-West oil pipeline, sources say

Saudi Arabia has resumed operations at its East-West Pipeline, potentially restoring exports from the Red Sea port of Yanbu later on Tuesday, according to three sources familiar with the situation. Drone attacks had previously prompted the shutdown of the pipeline on September 13, causing crude loadings at Saudi Arabia's Yanbu port to cease.

The revival of supplies on Tuesday contributed to a decline in global oil prices as traders reacted negatively. Prior to the disruption caused by the Strait of Hormuz, Saudi Arabia had been utilizing the pipeline to channel around 4 million barrels per day, constituting roughly 4% of the world's oil supply, to the Yanbu port. Following the restart, the pipeline was operating at a reduced capacity, as reported by two of the sources.

The state oil company, Saudi Aramco, has not yet commented on the matter, but one source suggested that the company aimed to restore the pumping rate to 4 million barrels per day, while another source indicated that full resumption might take several weeks. The pipeline will recommence supplying crude to Aramco refineries situated along the Red Sea coast, with one cargo scheduled to load at Yanbu later on Tuesday, bound for China.

Additionally, two trading sources reported that market participants were preparing for Saudi oil shipments by relocating tankers to Egypt's Mediterranean Port Said for ship-to-ship transfers and Sidi Kerir.