Saudi pipeline said to be building crude volumes as Yanbu loading stays halted

Saudi Aramco has told Asian refiners loadings at Yanbu could resume soon, but tankers there have yet to load, according to a report citing Vortexa and JPMorgan data.

Saudi Arabia's East-West Pipeline is building up crude volumes again, according to a report by BigGo Finance citing Vortexa and JPMorgan data from September 22 and 23. Tanker loading at the Red Sea port of Yanbu has not resumed as of that reporting, and no dated confirmation of the pipeline's status has emerged since.

The pipeline was shut down on September 10 after drones launched from Iraqi territory struck it, Saudi Arabia's Ministry of Energy said at the time, reporting a number of injuries and describing the shutdown as a precaution. The line normally carries about 4 million barrels a day toward Yanbu, of which roughly 2 million barrels a day are consumed by refineries on the Red Sea coast, out of a designed peak capacity of 7 million barrels a day, BigGo Finance reported. The 745-mile pipeline is Saudi Arabia's main route for bypassing the Strait of Hormuz.

After the shutdown, loadings at Yanbu nearly stopped, and Saudi Arabia shifted exports to Ras Tanura on the Persian Gulf and to ship-to-ship transfers in the Gulf of Oman for delivery to Asia, according to BigGo Finance. Saudi Aramco has since told at least three Asian refiners that Yanbu loadings could resume soon, the first clear signal to buyers on supply restoration since the outage began, the report said. Brent crude fell below $100 a barrel on expectations of a recovery, with news of a possible restart on September 22 adding further selling pressure, BigGo Finance reported.

The Houthis have declared a blockade of Saudi Red Sea ports while saying navigation remains safe for other shippers, a move aimed at tankers still loading at Yanbu, according to IBTimes JP. Houthi officials have said any US backing of Saudi Arabia will draw attacks on American interests across the region. If crude is building in the pipeline without reaching tankers, supply is accumulating rather than reaching the market, leaving the immediate constraint on Saudi export capacity in place. That is marginally bearish for a crude price that has been supported by the threat to that capacity, though the outlook still depends on when loading at Yanbu actually restarts.