Saudi Arabia is seeking to partially resume operations on the East-West oil pipeline within days, after a drone attack launched from Iraq last week halted flows of about 4 million barrels per day. U.S. Interior Secretary Doug Burgum said the kingdom was working to repair the pipeline as quickly as possible.
Inventories support continued vessel loading
Saudi Arabia announced after the attack that it had shut down the pipeline as a precaution, after it was targeted several times in the Riyadh and Madinah regions.
Burgum said oil inventories at the end of the pipeline would allow vessels to continue loading despite the temporary shutdown, urging reliance on information from Riyadh about the pipeline's status.
Energy data firm Kpler estimated crude inventories at Yanbu at about 9 million barrels on Monday, compared with total storage capacity of around 24 million barrels. How long these inventories last will depend on the pace of exports.
Repairing pumping stations
Repairing damaged pumping stations and restoring full operating capacity could take longer than partially resuming operations. Michael Haigh, head of commodities research at Societe Generale, estimated that repairs could take 3 to 7 days depending on the extent of the damage, and possibly longer depending on the scale of the damage to the pipelines.
An alternative route to the Strait of Hormuz
The East-West pipeline, known as Petroline, runs 1,200 kilometers from Saudi Arabia's oil-producing region on the Arabian Gulf to the Red Sea port of Yanbu, allowing Saudi crude to reach global markets without passing through the Strait of Hormuz.
Saudi crude oil exports from Yanbu rose to more than 4 million barrels per day between April and June after the kingdom diverted more crude away from the Strait of Hormuz. The pipeline was built in the early 1980s, when the Tanker War threatened shipping in the Arabian Gulf.
A White House official said the United States was leading efforts to develop additional infrastructure and pipelines in the Middle East to transport oil to global markets without passing through the Strait of Hormuz.
