Saudi Aramco has resumed operations on its East–West crude oil pipeline on Sunday, with crude loading at the Red Sea’s Yanbu port now averaging around 3.5 million barrels per day. The 750-mile-long pipeline serves as a critical alternative route circumventing the Strait of Hormuz. It had been suspended since a drone attack on September 10, triggering immediate global supply concerns.

The question remains: will the pipeline’s restoration actually bring down oil prices?

First, the dual-channel capacity is questionable. The East–West pipeline has a maximum throughput of 7 million barrels per day, but current output after restart stands at only 3.5 million—far below full capacity. Meanwhile, Saudi crude loading volumes via the Strait of Hormuz have already risen significantly in recent weeks.

Operating both routes at high levels places substantial strain on Saudi Arabia’s logistical coordination, port infrastructure, and domestic refinery distribution. Simply restoring the pipeline does not guarantee that crude will flow into markets at the pace anticipated by traders.

Second, overall export volume remains the true determinant of price dynamics. Market attention is not solely focused on whether Yanbu has resumed shipments, but on whether Saudi Arabia can restore or exceed pre-attack export levels. With Brent crude still trading above $105, traders have not rushed to sell, indicating skepticism about the immediate impact of the pipeline’s reopening. Instead, the market is awaiting confirmation through physical flows, not just news-driven sentiment easing.

In my assessment, whether Brent crude can break below $100 per barrel on a sustained basis over the next month hinges on two hard metrics: consecutive weekly increases in Saudi official export data, and a stable loading rhythm at Yanbu exceeding 3 million barrels per day. Without these, the pipeline’s restoration merely reopens one route—but fails to restore market confidence.

Original source: toutiao.com/article/1877681048639627/

Disclaimer: This article reflects the personal views of the author.