Saudi Arabia Partially Restores East-West Pipeline as Asian Refiners Seek Loading Clarity
A partial pipeline restoration sent ICE Brent front-month down 2.7% on Wednesday, but Asian refiners still lack certainty over October cargo pickup points and pricing.
Saudi Arabia partially restored its East-West pipeline on Wednesday (2026-09-16), sending ICE Brent crude front-month down 2.7% to under $102 a barrel — the first meaningful relief in a September that had already seen futures gain almost 20%.7,6
Even so, oil has gained more than 70% in 2026, sustained by the U.S.-Iran conflict, the Russia-Ukraine war, and continuing Houthi pressure on Saudi infrastructure. Partial repair is not the same as an end to the disruption.7
The pipeline had become the main bypass around the Strait of Hormuz after Gulf shipping lanes were severely disrupted earlier this year, recently carrying an estimated 4–5 million barrels per day, according to Saxo Bank data. When it went down, physical and paper crude split sharply: ICE Brent futures had been trading near $110 per barrel while the price of physical crude for immediate delivery in Europe surged above $130, Saxo reported.6
Asian refiners bore much of the operational disruption. At least two asked Saudi Aramco on Monday (2026-08-17) whether they could take delivery of purchased cargoes at Egypt's Mediterranean port of Sidi Kerir rather than Yanbu on the Red Sea, Bloomberg reported, citing anonymous trading sources. The SUMED pipeline, which connects Ain Sokhna on the Red Sea to Sidi Kerir on Egypt's north coast, can handle around 2.5 million barrels per day at full capacity.4,2
Aramco's answer was largely no. Most refiners in China, India, and Taiwan were directed to continue loading at Yanbu, the same Bloomberg sources said. The port remains exposed to Houthi risks at the Bab el Mandeb chokepoint, but Aramco has been routing crude northward through the Red Sea to sidestep the southern threat.4
Saudi crude exports via the northern Red Sea rose by roughly a third after the Houthi blockade was announced on July 20 (2026-07-20), reaching approximately 1.1 million barrels per day as of late August (2026-08-21), Kpler data showed. Shipowners including Sinokor Group facilitated shuttle tanker movements between Yanbu and Ain Sokhna, giving Aramco customers access to the SUMED system, according to Rigzone.5
The total volumes being redirected are substantial. Kpler's seven-day average of oil transit flows climbed to nearly 12 million barrels per day by Sunday (2026-09-13), the fastest pace since the June-July recovery period. Aramco had targeted moving more than 5 million barrels per day through alternative routes to stabilize supply, according to industry estimates.6,1
The pricing side remains unsettled. Aramco informed at least two Chinese refiners that it may introduce a separate official selling price for oil loaded at Sidi Kerir, anonymous trading sources told Rigzone. The producer had not finalized the mechanism's structure or its starting date, those traders said. A dedicated Sidi Kerir OSP would fold the logistics cost into the contract price, removing the current ambiguity around how refiners absorb freight differentials on Egyptian-routed cargoes.3
ICE Brent crude front-month traded at $103.91 per barrel on September 17 (2026-09-17), above the sub-$102 level reached following the restart news but well below the $110 futures level and the $130-plus physical spikes at the height of the outage. Dubai crude, the benchmark underpinning most physical contracts to Asia, was quoted at $118.84 per barrel on September 17 (2026-09-17) — a wide premium over Brent that signals persistent concern about Middle Eastern supply reliability.6,7
The specific signal for Asia-focused crude traders is Aramco's decision on the Sidi Kerir pricing mechanism: whether it proceeds, and on what timeline, given that October loading programs are already in play and most Chinese, Indian, and Taiwanese refiners have been pointed back at Yanbu. A formalized price differential for Egypt-routed crude would lock in higher cargo costs for buyers who shift their liftings west, potentially for months.3,4