Last week’s drone attacks on Saudi Arabia’s key East-West oil pipeline have caused damage that could take weeks to repair, potentially significantly cutting the disrupted crude oil flows from the Middle East.
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.
There has been damage to the pipeline, including at one major pumping station along the pipeline route, satellite images released by Vantor and published via Getty Images showed.
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.
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.
As a result, 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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