Saudi Oil Lifeline May Reopen as Aramco Eyes Yanbu Restart
Saudi Aramco officials have informally told at least three Asian refiners that they would soon be able to pick up crude oil cargoes at the Yanbu port on the Red Sea, anonymous traders with knowledge of the matter told Bloomberg on Tuesday. Saudi Arabia has halted loadings at the Yanbu port, its key export terminal that bypasses the Strait of Hormuz, since the September 10 drone attacks on the…
Saudi Arabia's state-owned oil company, Aramco, may soon reopen oil lifeline at the Yanbu port on the Red Sea, according to informal assurances given to at least three Asian refiners. The port has been halted since September 10 drone attacks on the East-West onshore oil pipeline, bypassing the Strait of Hormuz, that supplies Saudi oilfields to the Yanbu port.
The pipeline was shut down after attacks from Iraq near the Iranian border. Prior to the attacks, the East-West pipeline allowed Saudi Arabia to reroute most of its crude from eastern Persian Gulf ports to the Red Sea port of Yanbu. However, with the pipeline out of service, Saudi Arabia has increased shuttle-shipping through the Strait of Hormuz.
Saudi Arabia has cut off Europe for October oil loadings from Yanbu. Repairs on the East-West pipeline could take three to five weeks, with partial operations at half capacity potentially returning within days. Full capacity is expected to return in about six weeks, according to Aramco. Increased shipments through Hormuz and a recovery of Yanbu loadings could ease market concerns about Saudi supply to refiners, who aim to maximize runs to take advantage of high refining margins, particularly for diesel.
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