Australian Energy Minister Chris Bowen will travel to Saudi Arabia next week to meet with Saudi Energy Minister, Prince Abdulaziz bin Salman, and get the latest updates on the state of operations and oil supply after the Kingdom shut down the East-West pipeline following drone attacks late last week.
Bowen will meet with Prince Abdulaziz bin Salman to “get direct from him the situation” about the pipeline, the Australian minister told ABC News in an interview.
“Getting the best information about the state of the pipeline, when it will return to more normal levels, what the approach of the Saudi Arabian government is will be key for ensuring that fuel security over coming weeks and months,” Bowen said.
Saudi Arabia was forced to temporarily shut down the East-West oil pipeline following drone attacks launched from the territory of Iraq close to the Iranian border. The shutdown of the pipeline is a precautionary measure, after the attacks resulted in a number of injuries, the world’s top crude oil exporter said.
The repairs could take three to five weeks, two regional officials briefed on the matter told The Associated Press.
The pipeline, on which Saudi Arabia has relied to export about 4 million barrels per day (bpd) from the Red Sea instead of the Strait of Hormuz since the Iran war began, may work partially during the repairs, one of AP’s sources said. However, the source couldn’t say how much crude oil could be shipped via a partially-operational pipeline.
Despite the fact that it is a major gas and LNG producer, Australia relies on imports for most of its transportation fuel supply. The situation became worse after a fire broke out at one of the only two refineries in the country in the early weeks of the Iran war.
At the end of March, the Australian government halved the fuel excise on gasoline and diesel for three months in a bid to alleviate financial stress from spiking fuel prices.
There are rumors the fuel excise may be reinstated, but the government is reluctant to do so, although it is not ruling out another excise cut if oil and fuel prices keep rising.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com
- Europe Gas Prices Jump 6% as Saudi Pipeline Shutdown Rattles Markets
- Chevron Expects LNG Prices To Remain High in the Short Term
- Wealthy Investors Flock To Oil & Gas Assets Amid Energy Crisis
