Saudi Arabia has ramped up its East-West pipeline to full capacity, moving around 7 million barrels of oil per day as it tries to keep exports flowing
after the Strait of Hormuz was effectively shut down due to the ongoing war in the Middle East.The oil pipeline that moves across the country from oil-producing areas in the east to the port of Yanbu on the Red Sea continues to be very important for shipping the crude oil that would have previously gone through the Strait of Hormuz. Crude oil that was previously moved by tankers through the Strait of Hormuz is now moved through the port of Yanbu and then shipped to the global market. According to people familiar with the situation, crude shipments from Yanbu have already reached about 5 million barrels per day, while another 700,000 to 900,000 barrels of refined products are also being exported daily through this route .Roughly 2 million barrels per day of the pipeline’s total capacity are being used to supply domestic refineries inside Saudi Arabia. While the East-West pipeline is helping to ease some of the pressure, it still cannot fully replace the volumes that used to pass through the Strait of Hormuz, which normally handles around 15 million barrels per day. Still, the alternative route has helped prevent an even sharper spike in global oil prices.The situation remains tense. Yemen’s Houthis have announced they are entering the conflict, raising new concerns about security in the Red Sea and the Bab el-Mandeb strait. Although there has been no confirmed plan to attack ships in that area yet, the Houthis have a history of using drones and missiles against vessels in the region. For many years, Saudi Arabia kept multiple plans in place in case they needed to close the Strait of Hormuz. Immediately following the 1st assault by either US or Israel's military on Iran, Saudi Arabia enacted their contingency organs. The East-West Pipeline has seen consist improvements since that time, leading to increased flow rates.The pipeline stretches more than 1,000 kilometres from the eastern oil fields to Yanbu on the Red Sea coast. It was originally built during the 1980s Iran-Iraq war when tanker attacks in the Gulf highlighted the risks of relying solely on the Strait of Hormuz. For now, this major rerouting is helping Saudi Arabia maintain a significant portion of its exports, but the ongoing conflict and potential threats in the Red Sea mean the situation could still worsen.There are a lot of eyes in world oil markets that will be observing to find out if this alternative route can deliver the necessary level of stability or if additional disruptions will push prices up even further.
