Saudi East-West Pipeline Reaches Full Capacity Amid Hormuz Disruption

The East-West Pipeline in Saudi Arabia has recently achieved its peak operational capacity of 7 million barrels per day, providing a crucial alternative during the ongoing closure of the Strait of Hormuz. This development comes as a significant response to a blockade that has drastically reduced oil traffic through the vital waterway by an estimated 90 to 95 percent.

According to sources within Saudi Aramco, the pipeline, known as Petroline, has been specifically designed to facilitate oil transport from eastern fields to the Red Sea port of Yanbu. This infrastructure was originally constructed in the 1980s amidst the Iran-Iraq War to mitigate risks associated with potential disruptions in oil transportation routes.

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Initially, the Petroline operated at a typical range of 1.7 to 2.8 million barrels per day. However, modifications that converted parallel natural gas liquids lines for crude oil service have enabled the pipeline to function at its maximum capability. This allows for approximately 2 million barrels per day to be allocated for domestic refining needs, while the remaining five million barrels are directed towards export at Yanbu.

Current data on tanker departures from Yanbu shows variability, with averages fluctuating between 3.66 and 5 million barrels per day, though the terminal’s loading capacity is estimated to be between 4 and 4.5 million barrels. These figures highlight the challenges posed by scheduling during wartime operations.

Despite the operational capabilities of the Petroline, it is estimated that Saudi Arabia is still managing to transport only about 50 to 70 percent of its typical pre-war export volumes through this route. The Strait of Hormuz usually handles around 20 percent of the global oil supply, but military conflicts, including recent U.S. and Israeli strikes against Iran, have severely impacted traffic, with reports suggesting that Iran has resorted to destructive measures along the strait.

As crude oil prices surge, with WTI closing around $101.18 per barrel on March 27 and Brent reaching between $105.32 and $112.57, analysts are adjusting their forecasts. Should the situation in the Strait of Hormuz fail to stabilize by mid-April, projections suggest oil prices could escalate to $150 to $200 per barrel in extreme scenarios.

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While the UAE’s Habshan-Fujairah pipeline also presents an alternative, the combination of the East-West Pipeline and its Emirati counterpart currently serves as the primary logistical solution for Gulf crude exporters navigating the crisis.

As Saudi Arabia increases its reliance on the Petroline, it transitions from a seldom-utilized route to one of critical importance in the global oil landscape. Its operation at full capacity underscores a strategic pivot in response to unforeseen geopolitical tensions affecting the oil market.