Aramco Restores East-West Pipeline as War Risk Closes In on Yanbu

Saudi Aramco has restarted its East-West pipeline, Petroline, just two weeks after attacks reduced its capacity to 4 million barrels per day (bpd) from 7 million bpd. The pipeline, which has traditionally carried the majority of Saudi crude around the Strait of Hormuz, has resumed operations at reduced rates. Tanker loadings at Yanbu, a key export hub, are also reportedly restarting, though regular exports have yet to fully recover.

According to Kpler, the pipeline was moving approximately 5.5 million bpd before the September attack, with about 4.5 million bpd destined for export from Yanbu. The pipeline itself suffered limited damage, with the main issue being the extensive damage to at least one pumping station. Temporary bypasses have been installed while permanent repairs are ongoing.

Yanbu had been exporting between 4 million and 4.5 million bpd prior to the attack, compared to around 750,000 bpd before the conflict began. The disruption of the pipeline has forced the SAMREF refinery at Yanbu to cut operations by about half, with reduced rates expected to continue into October. Petroline typically operated far below its 7 million bpd capacity, but Aramco has been pushing more crude west as traffic through Hormuz has fallen.

The attack on the East-West Pipeline forced Aramco to temporarily revert to using alternative routes. Saudi-linked Very Large Crude Carriers (VLCCs) transiting through Hormuz reached their highest weekly level since the war began after the pipeline went down. Riyadh has shifted more exports eastward while Yanbu was effectively cut off. Lloyd's List Intelligence expects Saudi-controlled tanker traffic through the strait to remain elevated as Aramco works through spot sales and Yanbu gradually returns to full operations.

The cost of using Yanbu has risen significantly due to war-risk insurance premiums, which have tripled to around 3% of a vessel's value. The latest attack follows multiple previous attempts on Aramco facilities in Yanbu over a week's time. Despite these disruptions, the pipeline is now relaunching, but the ongoing threats from various actors, including the Houthis, remain a concern.