Saudi Arabia has restarted its economically vital East-West pipeline, and immediately afterward Brent futures fell by more than $2 a barrel, hitting their lowest level since September 8, media reports say.
The pipeline shut down on September 13 after drone strikes knocked it offline and halted oil loading at the Saudi Red Sea port of Yanbu. Flow has now resumed, but volumes remain low — according to media reports, it will take weeks before throughput returns to previous levels.
The pipeline, also known as Petroline, runs the length of Saudi Arabia from east to west. It starts at Abqaiq — one of the world's largest crude oil processing facilities — and ends at the Red Sea port of Yanbu. The entire route spans roughly 1,200 kilometers and relies on a chain of powerful pumping stations.
This route has become especially important since shipping through the Strait of Hormuz grew more difficult. Before the incident, Saudi Arabia was sending around 4 million barrels a day through the pipeline to Yanbu — nearly 4% of global oil consumption.
According to the U.S. Energy Information Administration, the system's nominal capacity is about 5 million barrels a day, with the ability to temporarily reach as high as 7 million if needed. That ceiling was hit after the April strikes. That doesn't mean 7 million barrels are currently flowing through the line, though — following the September attack, Saudi Aramco is first looking to stabilize flow at around 4 million barrels a day.
People familiar with the matter told media outlets that a full recovery from the damage will take several more weeks. That matters, because the first reports of the pipeline's "full recovery" created a misleading impression that Saudi exports were already flowing normally. For now, that is not yet the case.
Still, even the partial recovery eased pressure on the market. The mere news that oil was flowing again toward Yanbu was enough to send prices lower. On Tuesday, Brent slid to around $98 a barrel, after weeks of geopolitical risk had kept prices firmly above the psychological $100 threshold.
The explanation is fairly simple. The East-West pipeline is one of the few corridors in the Persian Gulf region capable of carrying large volumes of crude while bypassing Hormuz. Before the war, nearly a fifth of global oil and petroleum product consumption passed through that narrow strait. Precisely because of the limited traffic there, alternative routes have become strategically valuable.
Petroline's benefit is even clearer when it comes to exports to Europe. The oil arrives directly at Yanbu, on the Red Sea, north of the Bab el-Mandeb strait. From there, tankers head to the Suez Canal and the Mediterranean without passing anywhere near Hormuz or Bab el-Mandeb. In other words, the Kingdom gets an overland bypass around two of the region's most dangerous maritime chokepoints.
The picture looks different for shipments to Asia. A tanker loaded at Yanbu bound for China, for example, typically still has to exit the Red Sea via Bab el-Mandeb or take a much longer route. According to media reports, a shipment to China is being prepared at Yanbu today — a sign that Aramco is rushing to get operations back on track.
The pipeline's shutdown on September 13 put Saudi Arabia in a tight spot. Traffic through Hormuz was already heavily restricted, meaning the eastern route through the Persian Gulf wasn't reliable, and the strikes on Petroline stripped the country of its main backup route to the Red Sea. For several days, Riyadh was forced to push more exports through the risky Hormuz route, while loading at Yanbu nearly ground to a halt.
The impact reached Europe as well. Saudi Aramco warned some of its European partners about possible supply disruptions for October, right as the diesel market was already under heavy strain. That's why the pipeline's recovery isn't just a Saudi story — it has a direct bearing on Europe's fuel market.
Europe is particularly sensitive to this issue right now. Diesel remains expensive both in Europe and the United States, while conflicts involving Iran and Russia are disrupting flows of both crude oil and refined products at the same time. That's why any news of a restored Red Sea route immediately moves prices.
On Tuesday, the market got another positive signal. Iran indicated it could reopen Hormuz within a week under certain political conditions and if pressure from the United States eases. That news, combined with the restored Saudi pipeline, pushed Brent down to its lowest level in two weeks.
None of this should be taken as a full return to normal, though. Sources told media that traffic through Hormuz remains far below pre-war levels, and the Saudi pipeline is still running at limited capacity. Meanwhile, the dangers surrounding Bab el-Mandeb and Yemen have not gone away.
For the Kingdom, Petroline is once again proving itself infrastructure of global significance. The pipeline was built four decades ago specifically as a hedge against Hormuz. Today it's doing exactly that job — giving OPEC's largest exporter a second route to the world oil market whenever the Persian Gulf becomes too risky a zone to rely on.