Saudi oil giant says pipeline will reach capacity in coming days
The Saudi oil giant Aramco says it will reach capacity of its East-West pipeline “in a couple of days” to get its product out to the global market.
Amin Nasser, Aramco’s CEO and president, said the East-West pipeline has a daily capacity of seven million barrels.
“We should be reaching capacity in a couple of days. It’s all been going on the repositioning of tankers from the east to west,” Nasser said. “This crisis happened all of a sudden, and tankers need to reposition to the West coast for loading.”
He added: “The situation at the Strait of Hormuz is blocking sizable volumes of oil from the whole region.”
The East-West pipeline sends oil to the Red Sea for transport. Aramco operates the pipeline from the Aqaiq oil processing centre near the Persian Gulf to the Yanbu port on the Red Sea, avoiding the chokepoint of the Strait of Hormuz.
Nasser hinted at global oil markets being squeezed the longer the Iran war goes on and shipments from the Mideast being affected.
“Given the current geopolitical situation, we may see inventories eroding and being drawn down faster as shipments are being curtailed from the region,” he said. “This is at a time when current global spare capacity remains extremely low.”
That likely could push the price per barrel globally even higher, translating to higher costs for gasoline and jet fuel.
