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Saudi Arabia Plans 1.2 Million BPD Pipeline Boost Amid Ongoing Supply Risks
Saudi Arabia is exploring plans to increase its pipeline crude export capacity to 10 million barrels per day (bpd), with Energy Minister Prince Abdulaziz bin Salman announcing that converting a gas pipeline to transport crude could add 1.2 million bpd within the next seven to eight weeks. This initiative represents a rapid response to ongoing supply risks, particularly in light of recent disruptions in the Strait of Hormuz, a critical shipping route for oil.
The East-West pipeline, which connects oil fields and processing facilities in the Gulf to the Red Sea port of Yanbu, currently has a capacity of approximately 7 million bpd. Following disruptions caused by the US-Iran conflict, Saudi Arabia has been rerouting around 4 million bpd to Yanbu, which accounts for about 4% of global oil supply. However, the pipeline faced setbacks after a drone strike in September, which temporarily halted operations but has since resumed, with flows recovering to nearly 6 million bpd by early October.
While the immediate pipeline conversion could provide a significant boost to exports, the Energy Ministry has indicated that achieving the full 10 million bpd capacity will take two to three years. Additionally, port capacity at Yanbu may pose a challenge, as ship-tracking data suggests it can only load around 4.5 million bpd, potentially limiting the effectiveness of increased pipeline volumes. This situation underscores the importance of ensuring that terminal upgrades and security measures are in place to support the planned expansion.
Source: KLEA News