Saudi Arabia Restarts East-West Oil Pipeline, Reuters Reports

Soudi Arabia has restarted operations at its East-West oil pipeline and could resume crude exports from the Red Sea port of Yanbu later on Tuesday, three sources familiar with the matter told Reuters.

Saudi Arabia shut the pipeline on September 13 following drone attacks, bringing crude loadings at Yanbu to a halt.

The restart helped put pressure on global oil prices, traders said. Brent crude futures fell by more than $2 a barrel on Tuesday, reaching their lowest level since September 8.

Saudi Arabia, the world's leading oil exporter within OPEC, has been using the East-West pipeline to redirect about 4 million barrels per day of crude to Yanbu after disruptions to oil flows through the Strait of Hormuz. The volume represents roughly 4% of global oil supply.

Two sources told Reuters that the pipeline was initially operating at a reduced rate after being restarted. One source said Saudi Aramco was seeking to restore the flow rate to about 4 million barrels per day, while a security source said a full return to normal operations could take several weeks.

The pipeline will also resume crude supplies to Aramco refineries along the Red Sea coast, one of the sources said. A cargo was scheduled to be loaded at Yanbu later Tuesday and was expected to be bound for China.

Two other trading sources said market participants were preparing for the resumption of Saudi oil shipments by moving tankers toward Egypt's Mediterranean port of Port Said and Sidi Kerir, where ship-to-ship transfers could be carried out.

Saudi Aramco did not immediately respond to a request for comment, according to Reuters.