According to people familiar with the matter, Saudi Arabia's East-West oil pipeline has now been fully repaired after being forced to shut down following a drone attack earlier this month.
Saudi Aramco has been testing the East-West pipeline and gradually raising pressure over the past week, aiming to restore meaningful throughput before the weekend, sources said. People familiar with the operations said overseas crude shipments through the pipeline have now resumed.
As of press time, Brent crude futures were up 2.13% at $99.52 per barrel, while WTI crude futures were up 2.50% at $94.72 per barrel. Gains for both have narrowed from earlier in the session.
Saudi Arabia's Ministry of Energy said in a statement on September 11 that the Riyadh section and the Medina region section of the country's East-West pipeline were attacked multiple times on the morning of September 10, and preventive shutdown measures had been taken for the pipeline.
The East-West pipeline is a key alternative route for Saudi oil exports to bypass the Strait of Hormuz. Built in the 1980s, the pipeline runs more than 1,200 kilometers from the oil-producing region in the eastern Persian Gulf to the Red Sea port of Yanbu in the west.
After the Strait of Hormuz was affected by the war and shipping was disrupted this year, Saudi Arabia quickly switched to exporting oil from the Red Sea through this pipeline. According to reports, after the outbreak of the US-Israel-Iran conflict, the daily throughput of the East-West pipeline rapidly increased from about 3 million barrels per day to 7 million barrels per day.
The resumption of exports through the East-West pipeline will reopen the alternative export route Saudi Arabia has been using during the Middle East war. Although Saudi Arabia has increased crude shipments through the Strait of Hormuz this month, the pipeline's restored exports will bring relief to buyers who have been urgently seeking supply. Some European customers had even been told they would not receive any crude allocation under long-term contracts next month.
When the East-West pipeline returns to full capacity, traders will closely watch how much crude Saudi Arabia still ships through the Strait of Hormuz. In September, Saudi Arabia used the Strait of Hormuz route to raise overall crude exports to a wartime high of more than 5 million barrels per day, with most of the supply going to Asia.
As the US-Iran war is about to enter its seventh month, the Persian Gulf route remains risky, with ships coming under attack from time to time. Meanwhile, the Red Sea route along Saudi Arabia's western border also faces threats from Yemen's Houthi armed group. The group has intensified attacks this month, targeting energy infrastructure in southwestern Saudi Arabia as well as the port of Yanbu. Yanbu is a Red Sea port and the terminus of the East-West pipeline.
Saudi Arabia has issued multiple warnings for several cities, including Riyadh, Jizan and the holy city of Mecca. The combination of blocked access to the Strait of Hormuz, disrupted Red Sea shipping and the closure of Saudi Arabia's East-West pipeline is putting unprecedented pressure on the global crude supply system.
Ben Cahill, a senior fellow at the Atlantic Council's Global Energy Center, previously noted that the Red Sea route has always been crucial, and that over the past six months, a major safeguard for energy security has been the ability to bypass risk areas through Saudi Arabia's East-West pipeline and another high-capacity alternative pipeline in the UAE. If the East-West pipeline were shut down for a long period, it would pose a huge challenge because this pipeline is currently the most important one bypassing the Strait of Hormuz.
Cahill added that the various buffers that helped the market withstand shocks over the past six months have basically been exhausted. Releasing strategic crude reserves played a key role, but a release on that scale cannot be repeated. If attacks continue and the Red Sea route faces the risk of disruption for some time, oil prices will rise further.
In addition, the outlook for shipping through the Strait of Hormuz still depends on the US-Iran rivalry. At present, the prospects for negotiations between the United States and Iran remain unclear. US President Trump said on September 27 that he expected the United States and Iran to restart talks within the next week. Trump also said he has "been thinking about" whether to resume military strikes on Iran, while US forces are helping ship "large amounts of oil" out of the Strait of Hormuz.
The media outlet, citing regional sources, said a new round of indirect talks between the United States and Iran is expected as early as the 28th, with mediators including Qatar working to broker them, but the two sides remain deeply divided on key issues. Iran wants the talks to focus on navigation through the Strait of Hormuz and the lifting of the US maritime blockade on Iran, while the Trump administration demands that Iran agree to concessions on the nuclear issue. However, Iranian media reported on the 28th that Iran's delegation has no plan to meet with the US side in New York.
On September 22, US special envoy Witkoff and Trump's son-in-law Kushner held indirect talks with Iranian Foreign Minister Araghchi during the UN General Assembly in New York. According to reports, Iran proposed that if the United States lifted the maritime blockade, canceled oil sales sanctions and restored a regional ceasefire, Iran would reopen the Strait of Hormuz and restart nuclear talks within seven days. However, Trump confirmed to the media on September 26 that he had rejected Iran's proposal.
Araghchi said in an interview on the 27th that despite Trump's public remarks, the US side had not yet formally conveyed to Iran through mediators its decision to reject the Iranian proposal. Iran is prepared for the resumption of war with the United States and is also ready for diplomatic engagement at any time.