Saudi Arabia restarts pipeline after drone attacks disrupt oil flow
Saudi Arabia has restarted a key pipeline after drone attacks knocked it offline, impacting global oil exports.
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Saudi Arabia has reportedly restarted a key pipeline that bypasses the Strait of Hormuz after drone attacks earlier in September forced it offline, according to sources. The restart could allow the kingdom to resume crude exports from its Red Sea port of Yanbu later Tuesday, according to three anonymous sources briefed on the matter.
The pipeline, which had previously carried about four million barrels a day—roughly 4% of the global supply—to Yanbu, was halted after the war with Iran disrupted shipping through the strait. Saudi Aramco did not immediately respond to the Daily Caller News Foundation’s request for comment.
Restarting pipeline operations
The pipeline was operating at a low rate after the restart, with sources indicating that Aramco is seeking to bring the flow back to four million barrels a day. However, a full resumption could take weeks, a security source told Reuters. An oil tanker was set to load at Yanbu later Tuesday and head to China.
The restart helped drive selling in oil markets Tuesday, with Brent crude, the international benchmark, falling more than $2 a barrel to its lowest level since Sept. 8.
Iran’s stance on Strait of Hormuz
A senior Iranian government official told Kyodo News on Tuesday that Iran would reopen the Strait of Hormuz within seven days if the U.S. takes initial steps toward easing military pressure, including ending its blockade of Iranian ports.
Ellen Wald, a nonresident senior fellow at the Atlantic Council’s Global Energy Center, noted that initial repairs might restore “perhaps 1 or 2 million” barrels a, but returning the line to full capacity would take “6 weeks or more.” She added that at least one pumping station appeared to have been destroyed and others were damaged.
Andrew Lipow, president of Lipow Oil Associates, suggested that Saudi Arabia could bring the pipeline back “much quicker, but at a reduced capacity” by routing oil around damaged pumping stations.
Global oil market impact
Energy Secretary Chris Wright told CNBC on Sept. 15 that the outage would be “measured in days.” By early June, Saudi Arabia had more than doubled its oil exports from Yanbu to more than 5 million barrels a day, according to the Associated Press, citing the International Energy Agency.
Diesel hit a record $6.53 a gallon nationwide Tuesday, according to the American Automobile Association (AAA).
Source: Daily Caller
