WTI futures fell to $101 a barrel around midday in New York after Bloomberg reported that Saudi Arabia could restore roughly half the East-West pipeline's capacity within days. The pipeline, a critical export route bypassing the Strait of Hormuz, has been shut since last week's drone attack.The outlet reported:State-run Saudi Aramco is working to bypass a damaged section on the route that will allow it to resume part of the pipeline's capacity, the person said, asking not to be identified because the matter is private.
The company is looking to return the conduit to its full capability in about six weeks, they said.A successful restart of the pipeline, which can carry 7 million barrels of crude per day to Yanbu on the Red Sea while bypassing the Strait of Hormuz, would likely provide welcome relief for Europe, which had crude cargoes for this month canceled because of the disruptions.However, the reported six-week timeline for full recovery is troubling news for Europe ahead of the Northern Hemisphere winter, with diesel in short supply and natural gas storage levels well below 15-year norms for this time of year.
Saudi Arabia's immediate response to the East-West pipeline disruption has been to ramp up crude loadings from its east coast terminals, maritime research firm TankerTrackers reported earlier today.Related:Saudis Threaten Retaliation After Alleged Houthi Drone Attack On Mecca Crosses "Red Line"Meanwhile, US diesel crack spreads showed no relief, still averaging around $116 a barrel around lunchtime in New York. US Energy Secretary Chris Wright told Bloomberg TV at the start of the week that the critical pipeline would be restarted "very soon.
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