Saudi Arabia could face further reductions in oil exports if its East-West pipeline to the Red Sea does not resume operations within days, according to oil buyers and traders cited by Reuters.
The pipeline has been used to transport around 4 million barrels per day to the Red Sea port of Yanbu, equivalent to approximately 4% of global oil supply, providing an alternative to shipments through the Strait of Hormuz.
Drone attacks forced Saudi Arabia to shut the pipeline on Friday. The extent of the damage and the expected duration of the outage have not been disclosed by Saudi authorities.
Industry sources provided different estimates for the repair period. One said repairs could take five to six weeks, while another said the pipeline could return sooner and potentially operate at reduced capacity while repair work continues.
Saudi Arabia’s government media office and energy ministry did not immediately respond to requests for comment cited in the source.
Yanbu Stocks Estimated to Cover Five to Seven Days
Three industry sources familiar with Saudi exports said inventories at Yanbu were sufficient to maintain exports for approximately five to seven days without additional flows through the East-West pipeline.
Saudi Arabia also has inventories available at Egypt’s Ain Sukhna port on the Red Sea and Sidi Kerir on the Mediterranean that could supply customers for several additional days, according to another source.
Industry estimates put storage capacity at approximately 35 million barrels at Yanbu, 18 million barrels at Ain Sukhna and 20 million barrels at Sidi Kerir.
The sources said the storage facilities were not full and that available inventories would eventually be depleted if pipeline operations did not resume.
Saudi Oil Supply Falls to Three-Decade Low
The International Energy Agency said on Friday that Saudi oil supply fell to its lowest level in more than three decades in August as flows through the Strait of Hormuz and Red Sea were reduced.
The IEA expects global oil supply to decline by 5.7 million barrels per day this year, equivalent to around 6%.
The Middle East supplied approximately 22 million barrels per day before the war. Industry sources said flows through the Strait of Hormuz have since declined to between 6 million and 9 million barrels per day.
Saudi Arabia told OPEC last week that its oil production fell to 6.2 million barrels per day in August from 10.9 million barrels per day in February, before the war began.
Red Sea Shipping Risks Continue
The pipeline shutdown follows several months in which the East-West route allowed Saudi Arabia to redirect exports away from the Strait of Hormuz.
Separately, Houthi fighters in Yemen, who have threatened Saudi oil shipments, seized an island near the entrance to the Red Sea on Friday.
The combination of lower flows through Hormuz, the East-West pipeline shutdown and risks affecting Red Sea shipping has reduced the routes available for Saudi crude exports.