Repairs to Saudi Arabia's 7mn b/d East-West crude pipeline could take weeks after attacks forced the vital export route offline, sources said on Monday.
State-controlled Aramco shut the pipeline on 10 September after attacks that Riyadh said originated in Iraq. Aramco has relied on the route for exports since the US-Iran war disrupted seaborne shipments through the strait of Hormuz.
A source said repairs were likely to take weeks rather than days; another said it could take up to a month. Saudi Arabia has not provided an update on the pipeline's status since it announced the closure on 11 September.
US energy secretary Chris Wright said the pipeline will be "back running very soon," without providing detail. He said he might have more clarity on a timeline for a restart on Tuesday, 15 September.
The pipeline shutdown has led to a sharp increase in oil prices. Front-month Ice Brent futures were trading today at around $107/bl, up by around $10/bl in the past week.
The pipeline carries crude from Saudi oil fields near the Mideast Gulf to the Red Sea port of Yanbu for export, and supplies some domestic refineries, power stations and desalination plants. While it could not replace all supply that moved through the strait before the war, the pipeline has helped relieve some pressure on global crude markets.
But exports from Yanbu had fallen before the pipeline outage, as a result of attacks by Yemen's Iran-backed Houthi militants on Saudi facilities and tankers carrying Saudi crude.
Saudi crude loadings from Yanbu were 2.6mn b/d in August, compared with about 4.8mn b/d in June before the Houthi began attacks, according to Kpler.
A prolonged outage may result in Aramco attempting to export more oil through Hormuz, although this remains risky. Two of its tankers were targeted in the strait earlier this month and escalating hostilities between the US and Iran in recent days have heightened the risk of further disruptions to shipping.
Around 20mn b/d of crude and oil products transited the strait of Hormuz before the US-Iran war. Current flows are much lower, although it is difficult to pinpoint an exact figure as tankers try to hide their positions to avoid being attacked. US energy secretary Wright said transits through Hormuz are about 10mn b/d, based on a seven-day running average.
