Saudi Arabia races to repair East-West pipeline after drone strike; export stocks at Yanbu down to 5-7 days
CommodityGeopoliticsMacro Impact 5
Saudi Arabia is racing to repair the East-West oil pipeline after a drone attack halted the flow of about 4 million barrels per day, or roughly 4% of global oil supply, to the port of Yanbu on the Red Sea coast. Three industry sources said the oil stored at Yanbu will only support exports for about 5-7 days. Meanwhile, reserves at the Ain Sukhna terminal on the Red Sea and Sidi Kerir on Egypt's Mediterranean coast, with capacity of about 18 million barrels and 20 million barrels respectively, can keep supplying customers for several more days, but these inventories are not full and will eventually run out if the pipeline does not come back online. Sources gave differing estimates of the repair timeline, with one saying it could take as long as 5-6 weeks, while another said it would be faster and that some oil could be pumped during repairs. Saudi Arabia's government media office and the energy ministry did not respond to Reuters requests for comment. Saudi Arabia told OPEC last week that its oil production fell to just 6.2 million barrels per day in August, from 10.9 million barrels per day in February before the war began. The International Energy Agency said Saudi Arabia's oil volumes dropped to their lowest in more than three decades in August and expects global oil supply to fall by about 5.7 million barrels per day this year, or roughly 6%.
