Some refiners in Japan this week rushed to buy Oman’s crude for earlier loadings after Saudi Arabia shut down its key pipeline bypassing the Strait of Hormuz, traders with knowledge of the purchases told Bloomberg on Wednesday.
Late last week, 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 on Thursday. 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 750-mile-long East-West pipeline became Saudi Arabia’s vital oil route to bypass the Strait of Hormuz after the Middle East conflict started and Hormuz was closed to shipping traffic. Thanks to the East-West pipeline, the Kingdom has managed to re-route most of its crude loadings from the western ports in the Persian Gulf to the Red Sea port of Yanbu.
Apart from announcing the shutdown of the pipeline and condemning the attacks, Saudi Arabia has not officially updated the market either on the extent of the damage or the timelines for repairs.
The repairs could take three to five weeks, two regional officials briefed on the matter told The Associated Press.
U.S. Energy Secretary Chris Wright insisted on Tuesday that the pipeline could be back into service within days.
Asian refiners are not sure yet how the shutdown of the pipeline would affect oil loadings at the port of Yanbu.
At least four Asian refiners haven’t received any clarification from Saudi Arabia yet, traders involved in the communication told Bloomberg on Monday. Two of these refiners expect to pick up their cargoes at Yanbu as scheduled if there is no communication about delays in the coming hours and days, according to Bloomberg’s trade sources, who wished to remain anonymous.
By Tsvetana Paraskova for Oilprice.com
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