Saudi Arabia: Yanbu pipeline restarts, Brent drops by over $2

The pipeline, which is approximately 1,200 kilometers long, was operating at a low flow rate on Tuesday, according to Reuters. Riyadh aims to gradually restore a flow of about 4 million barrels per day, which accounts for nearly 4% of global oil supply.

This artery has become strategic since disruptions in the Strait of Hormuz. It allows Saudi Arabia to transport crude from the eastern part of the country to the Red Sea, bypassing the main oil transit point in the Gulf.

The restart has impacted prices. Brent fell below $98 per barrel, reaching a two-week low, according to the Financial Times, as markets factor in the prospect of a gradual return of Saudi volumes via Yanbu. However, this easing occurs in a market still strained by the global diesel shortage and supply disruptions in the Middle East.

Saudi Aramco also plans to resume supply to its Red Sea refineries. A first shipment of crude from Yanbu to China is expected, according to Reuters. The company had not yet publicly commented on the precise status of repairs on Tuesday.

The pipeline had been halted following drone attacks that damaged three pumping stations. Industry sources estimated last week that complete repairs could take five to six weeks, while leaving open the possibility of a quicker partial resumption.