Saudi Arabia's East-West oil pipeline has been repaired and exports have resumed following a drone attack. The restart of this critical energy corridor is reshaping the global crude supply landscape and placing pressure on the recent rally in oil prices.

On Tuesday, according to people familiar with the matter cited by The Wall Street Journal, Saudi state oil company Saudi Aramco began loading crude through the East-West pipeline to the Red Sea port of Yanbu on Sunday, with pipeline throughput currently at approximately 3.5 million barrels per day. Meanwhile, Saudi Arabia's crude loadings at the Strait of Hormuz had already surged significantly, and the prospect of both export routes operating simultaneously has drawn close market attention.

Following the news, international benchmark Brent crude pared some of its gains on Monday but remained above $105 per barrel.

Analysts noted that whether Saudi Arabia can restore shipments from Yanbu port while maintaining elevated export volumes through the Strait of Hormuz will be the key variable determining whether total exports can surpass pre-attack levels, and in turn whether oil prices can see a meaningful pullback in the near term.

Pipeline Repaired, Critical Energy Artery Restarted

The East-West pipeline spans 750 miles across Saudi Arabia, connecting the major oil-producing regions along the Persian Gulf coast to the Red Sea port of Yanbu. It serves as Saudi Arabia's core alternative route for transporting crude without passing through the Strait of Hormuz.

The pipeline has a maximum capacity of 7 million barrels per day, of which approximately 2 million barrels supply domestic refineries and the remainder is used for exports. According to analyst estimates, before the drone attack on September 10 damaged the pipeline and halted operations, daily throughput was approximately 4 million barrels, accounting for about 4% of global supply.

According to people familiar with the matter who spoke to The Wall Street Journal, Saudi Aramco began loading operations at Yanbu port on Sunday, with pipeline throughput currently at approximately 3.5 million barrels per day, with some volumes continuing to be directed to domestic refineries. Saudi Aramco declined to comment.

Hormuz Exports Surge, Dual-Route Operations Test Capacity

During the suspension of the East-West pipeline, Saudi Aramco increased crude loading through the Persian Gulf port of Ras Tanura to compensate for the gap created by the Red Sea route disruption. Data from ship-tracking agency Kpler shows that loadings at Ras Tanura recently surged from 1.5 million barrels per day in early September to approximately 6.5 million barrels per day.

Behind this shift is the ongoing risk Saudi Arabia faces at the Strait of Hormuz. To reduce transportation risks, Saudi Aramco had asked some Asian customers — its most important crude buyers — to collect cargoes themselves in waters outside the strait near the Omani coast, according to prior reporting by The Wall Street Journal.

Meanwhile, after Houthi forces intensified attacks on Saudi-related vessels near the Bab el-Mandeb Strait in the Red Sea in July, some Saudi crude cargoes were rerouted northward through the Suez Canal and the SUMED pipeline system.

Whether Export Volumes Can Be Sustained Will Determine Oil Price Direction

Hamad Hussain, a senior economist at Capital Economics, said the core question oil market traders are most focused on is whether Saudi Arabia can restore shipment volumes from Yanbu port while maintaining elevated exports through the Strait of Hormuz.

He noted that if elevated Persian Gulf export volumes remain stable and Yanbu port operations gradually recover, Saudi Arabia's overall crude exports could surpass pre-attack levels, thereby reversing the recent oil price rally.

However, Hussain also warned that "given the threat the Houthis pose to energy infrastructure, exporting from Yanbu has become far more difficult than in the early stages of the conflict." This means security risks along the Red Sea route remain an important variable constraining Saudi Arabia's export recovery, and whether the pipeline can sustain high-level operations over the long term remains uncertain.