Saudi Aramco seeks to restore half of pipeline capacity within days

Saudi Aramco is working to bypass a damaged section of its East-West Pipeline and restore roughly half of its capacity within days, according to Bloomberg, citing a person familiar with the matter. Full restoration of the 1,200-kilometer conduit is expected to take about six weeks.bloomberg

The pipeline was shut down last Friday after drone attacks by Iran-aligned groups struck the route, which has served as the primary artery for Saudi crude exports since hostilities involving Iran effectively closed the Strait of Hormuz six months ago. The line had been moving 4 million to 5 million barrels per day — roughly 4% to 5% of global supply — from Saudi Arabia's eastern producing region to the Red Sea port of Yanbu.cnbc+1

Competing Timelines

U.S. Energy Secretary Chris Wright offered the most optimistic assessment on Tuesday, telling CNBC Comcast Corporation ↘ 1.15% on the sidelines of a G20 energy meeting in Houston that "this will be a brief and temporary interruption" that would be "measured in days". Wright added that Saudi Arabia is rerouting some oil through the Strait of Hormuz with U.S. military assistance while repairs continue.ibtimes+2

Sources who spoke to Reuters gave a wider range of estimates. One said the structural damage could take five to six weeks to fully repair, while another said the pipeline could resume partial pumping sooner. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.57% has said estimates range from near-term resumption to eight weeks, warning that Brent could rise above $120 per barrel in the event of prolonged disruption.reuters+2

Market Reaction

Oil prices retreated on Wednesday after climbing sharply earlier in the week. Brent crude futures fell about 0.9% to around $107.82 a barrel, while U.S. West Texas Intermediate declined roughly 0.9%, according to CNBC. Both benchmarks had settled at their highest levels since May 19 on Tuesday after Saudi Arabia suspended oil loadings at Yanbu and canceled some crude shipments to European buyers.economies+1

The pullback was driven partly by an unexpected build in U.S. crude inventories. American Petroleum Institute data showed stockpiles rose by 7.1 million barrels in the week ended September 11, far above the 1.6-million-barrel draw analysts had expected.cnbc+1

Broader Supply Risks

The pipeline outage compounds an already strained supply picture. Commodity vessel traffic through the Strait of Hormuz fell to fewer than 10 transits per day over the weekend, down from a 10-day average of 14. In Libya, the National Oil Corporation suspended operations at three oil fields after protesters shut a valve on a separate export pipeline, though output remained near 1.4 million barrels per day. Meanwhile, Washington has so far resisted Saudi requests for direct military intervention, limiting its involvement to intelligence support, three sources told Reuters on Monday.reuters+2