Saudi Arabia Resumes Crude Oil Loadings At Red Sea Port Of Yanbu Amid Strait Of Hormuz Disruption

Saudi Arabia has resumed loading crude oil at its Red Sea ports after restarting the East-West Pipeline, allowing the country to move more oil without sending it through the Strait of Hormuz.

Crude loadings at Yanbu have been around 2 million barrels per day (bpd) since last week, according to estimates from two trade sources.

Saudi Aramco also told customers on Monday evening about its October loading schedule from Yanbu, an Asian refining source said.

The pipeline had been shut after drone attacks damaged pumping stations on September 10. Saudi Arabia stopped the pipeline on September 11, which also halted crude exports from Yanbu.

The pipeline has now restarted, but it is not yet operating at its earlier level. Kpler estimates that it is currently carrying about 2.65 million bpd. The ship-tracking company expects flows to increase to between 3 million and 4 million bpd in the coming days.

A return to the pipeline’s earlier capacity of about 5.5 million bpd could take another month, Kpler said.

The Strait of Hormuz remain heavily affected by the conflict between the United States and Iran.

At least one refiner loaded a crude cargo from Yanbu late last week, according to the supplied trade information.

Satellite images taken on September 27 showed nearly 10 million barrels of crude being loaded at Yanbu and the nearby Al Muajjiz terminal, according to tanker-tracking company TankerTrackers.com.

The company said it identified 40 tankers in the area. The figure included tankers regardless of whether they were loading or how close they were to the terminals. The images also showed additional refined-product loading activity.

The renewed loading activity comes after Yanbu’s crude exports were stopped earlier this month when the pipeline was shut.

Saudi authorities blamed the drone attacks on Iraqi militias.

Yanbu’s crude inventories also increased by about 1 million barrels on September 22. It was the first increase since the attacks.

The East-West Pipeline gives Saudi Arabia an overland route to move crude towards its Red Sea terminals without using the Strait of Hormuz.

Before the conflict, nearly 20% of the world’s oil supply moved through the strait. Maritime traffic through the waterway was later sharply reduced after Iran imposed a naval blockade.

After the pipeline was shut, Saudi Arabia redirected some oil towards the east. Aramco also loaded crude onto tankers in the Gulf of Oman using ship-to-ship transfers.

The pipeline restart has now allowed crude shipments from Yanbu and Al Muajjiz to resume.

Oil exports from the Middle East have also recovered. Kpler estimates that crude exports from the region reached about 12.8 million bpd so far in September.

References: oilprice, TOI