SINGAPORE/NEW DELHI — Saudi Arabia has restarted operations at its East-West Pipeline and may resume crude exports from the Red Sea port of Yanbu, according to three sources familiar with the matter.
The move is adding to signs that oil supplies from the Middle East could begin to recover.
The restart also contributed to a decline in global oil prices. Brent crude, the international benchmark, fell by more than $2 a barrel to around $97, its lowest level since September 8.
Saudi Arabia shut down the pipeline on September 11 after drone attacks that Riyadh blamed on an Iraqi militia. The shutdown halted crude loadings at Yanbu.
The East-West Pipeline has become an important alternative route after the U.S.-Israeli war on Iran disrupted oil shipments through the Strait of Hormuz.
Saudi Arabia has been using the pipeline to move about 4 million barrels of crude per day to Yanbu—equivalent to roughly 4% of global oil supplies.
Saudi state oil company Aramco did not immediately respond to a request for comment.
FULL RECOVERY MAY TAKE WEEKS
Sources said the pipeline was operating at a low rate after restarting.
Aramco is working to restore flows to around 4 million barrels per day. The pipeline has a total capacity of 7 million barrels per day.
A security source said the system could reach 40% of its capacity within several days, but a full restart could take six to eight weeks.
Another oil industry source estimated that restoring full pumping rates could take up to six weeks.
Satellite images and industry sources indicate that three pumping stations were damaged in the drone attack. The pipeline is supported by 11 pumping stations and two pressure-relief stations.
The restart is expected to restore crude supplies to Aramco refineries along the Red Sea coast.
One source said a cargo was scheduled to load at Yanbu later Tuesday and was expected to be bound for China.
Traders were also preparing for the return of Saudi oil shipments. Two sources said tankers were being moved to Egypt’s Port Said and Sidi Kerir for possible ship-to-ship transfers.
Oil prices have also declined after Iran said it could reopen the Strait of Hormuz within seven days. Saudi Arabia has additionally loaded more vessels at its Ras Tanura port, raising expectations of increased exports through the waterway.
