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Global Oil Prices Drop as Saudi Arabia Restarts East-West Pipeline After Drone Attack

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Cyril Barabaltchouk
News Writer
An employee walks along a pipeline carrying crude oil from the Juaymah Tank Farm in Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia, on October 1, 2018. (Source: Getty Images)
An employee walks along a pipeline carrying crude oil from the Juaymah Tank Farm in Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia, on October 1, 2018. (Source: Getty Images)

Saudi Arabia has officially restarted operations on its East-West Pipeline and is preparing to resume crude exports from the Red Sea port of Yanbu on September 22, Reuters reported, citing industry sources.

The critical pipeline was shut down on September 13 following targeted drone attacks, which completely halted crude loadings at the Yanbu port.

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Drone strikes on Saudi Arabia’s East-West pipeline were launched from Iraq’s Maysan province, leading Baghdad to fire local security commanders, according to the Foundation for Defense of Democracies (FDD).

The FDD said the attack was executed by a splinter network of Iran-backed militias operating outside established command structures.

Following the disruption of maritime oil flows through the Strait of Hormuz due to the US-Israeli war on Iran, Saudi Arabia—OPEC’s leading exporter—has relied heavily on the East-West Pipeline to safely reroute approximately 4 million barrels per day (bpd) to the Red Sea coast.

This bypassed volume accounts for nearly 4% of total global supply, Reuters wrote.

Sources briefed on the matter indicated that while the pipeline is active, it is currently pumping at a reduced rate. State energy firm Saudi Aramco is working to restore the full 4 million bpd capacity, though a security source cautioned Reuters that achieving full resumption could take several weeks.

Saudi Aramco has not yet publicly commented on the operational timeline.

The news of restoring supply channels immediately eased global oil markets. Traders reacted to the pipeline’s restart with a sell-off, driving Brent crude futures down by more than $2 a barrel to their lowest price point since September 8, Reuters reported.

In the immediate term, the active pipeline will resume supplying Aramco’s Red Sea coastal refineries. According to Reuters, at least one cargo was scheduled to load at Yanbu on September 22, bound for China.

Meanwhile, trading sources confirmed that oil markets are preparing for renewed Saudi maritime loadings, with tankers already being repositioned to Egypt’s Mediterranean Port Said and Sidi Kerir terminals for ship-to-ship transfers.

It was recently reported that Ukrainian President Volodymyr Zelenskyy would meet US President Donald Trump at the UN to propose a mutual energy truce, offering to halt strikes on Russian oil refineries if Moscow stops targeting Ukrainian power grids.

Trump was reportedly pressing Kyiv to stop the refinery attacks as his administration’s escalating war with Iran severely spikes global fuel prices ahead of US midterms.

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