Saudi Arabia is going all out to push forward a strategic restructuring of its oil export infrastructure. With the Strait of Hormuz closed, Saudi Energy Minister Prince Abdulaziz bin Salman announced a plan to sharply raise the capacity of the East-West Pipeline from the current 7 million barrels per day to 10 million barrels per day within two to three years, an increase of 43%. The expansion plan was unveiled at the WPC Energy Congress held in Riyadh. After the closure of the Strait of Hormuz, this pipeline has become the core channel for Saudi crude exports, and about 4 million barrels per day are now being shipped out through the Red Sea port of Yanbu. Yet this strategic artery is not invulnerable. On September 11, Saudi Arabia blamed a drone attack by Iraqi militia forces for forcing the pipeline to shut down.
The pipeline disruption dealt a direct blow to market supply. The energy minister said that as of October 6, pipeline flows had recovered to 5.8 million barrels per day, but were still 1.2 million barrels below the current maximum designed capacity of 7 million barrels per day. At the same time, Saudi Aramco CEO Amin Nasser said at the same event that the company is studying additional crude export routes and expanding overseas oil storage capacity.
The pipeline becomes an export lifeline after the Hormuz closure
This 740-mile pipeline, also known as the Petroline, links Saudi Arabia's eastern oil fields with the Red Sea port of Yanbu, and quickly upgraded from an auxiliary route to a main export line after the Strait of Hormuz was closed. According to Zawya, Saudi Arabia has used the pipeline to reroute about 4 million barrels per day of crude away from Hormuz and export it through Yanbu. Earlier, some media tracked the pipeline's single-day flow once reaching a record peak of 7 million barrels per day. The newly announced expansion target means Saudi Arabia will add another 3 million barrels per day of transport capacity on top of the existing base, at which point a single onshore pipeline's capacity would exceed the daily output of most major oil-producing countries in the world.
Alternative routes also face security threats
The plan to bypass Hormuz is not without worries. After crude leaves Yanbu, it still must pass through the Bab el-Mandeb Strait to reach major Asian markets, and this chokepoint faces threats from Houthi forces. According to reports, the Iran-backed Houthi rebels in Yemen publicly declared in July this year that they would block Saudi tanker traffic through the strait. This means that even if the East-West Pipeline expansion plan is implemented on schedule, Saudi Arabia's export supply chain will still face persistent geopolitical risks in the Red Sea segment. For Asian buyers that rely on Middle Eastern crude supplies, the security of alternative shipping routes will be an important variable in assessing supply stability.
Saudi Arabia stresses energy resilience as Aramco eyes diversified layout
At the WPC Energy Congress, Prince Abdulaziz bin Salman gave a systematic explanation of Saudi Arabia's energy resilience. He said energy resilience "must be measured not only by maintenance, repair, rerouting, substitution and recovery capabilities, but also by the ability to continue supplying under pressure." Amin Nasser further added at the strategic level that Saudi Aramco is coordinating with the Ministry of Energy to study new crude export routes while expanding its overseas strategic oil storage layout. He also said the company is using cutting-edge technology to strengthen facility inspections and accelerate repairs to damaged facilities. These remarks show that Saudi Arabia is incorporating the building of capacity to respond to geopolitical shocks into a long-term strategic framework, and pipeline expansion is only one component of this multi-layered layout.
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