After the closure of the key bypass pipeline, Saudi Arabia is reportedly seeking to increase crude oil exports via the Strait of Hormuz

Saudi Arabia is seeking to further increase crude oil exports through the Strait of Hormuz to compensate for the impact of the shutdown of a key bypass pipeline following attacks.

On Monday, September 14 (ET), Bloomberg, citing informed sources, reported that Saudi oil shipments through the Strait of Hormuz during the first ten days of this month have already increased compared to August, and the country is now seeking to further boost supplies passing through the strait.

Also on Monday, U.S. President Trump signaled his willingness to engage with Iran. He posted on his social media platform, saying that Iran is "eager to reach an agreement and desperately needs to do so. I will decide whether the U.S. chooses to participate—we are open to it."

Before Trump's remarks, a planned meeting on Monday in Oman between Iran and other Gulf countries was postponed, setting back diplomatic efforts to restore shipping through the Strait of Hormuz. Iran said the meeting was postponed at Saudi Arabia’s request.

For Saudi Arabia, the move to increase exports via Hormuz comes after its key pipeline for bypassing the strait was forced to shut down due to attacks last week. This pipeline had been the main route for Middle Eastern oil to circumvent the Strait of Hormuz.

East-West Pipeline previously transported up to 5 million barrels per day

Last week, Saudi Arabia announced the closure of the East-West Pipeline, which had been a vital "lifeline" for maintaining crude oil exports after risk levels in the Strait of Hormuz surged.

This pipeline, approximately 1,200 kilometers long, runs across the Arabian Peninsula, connecting eastern Saudi oil fields with the port of Yanbu on the Red Sea. Its maximum capacity is 7 million barrels per day, with around 5 million barrels available for export and the remainder supplied to refineries on the Red Sea coast.

Following the outbreak of conflict with Iran, Saudi Arabia quickly activated this pipeline to transfer some crude from the Persian Gulf to the Red Sea for export, thereby reducing dependence on the Strait of Hormuz.

According to Bloomberg, Saudi crude exports dropped to about 3 million barrels per day in August, the lowest in at least nine years. After entering September, exports gradually recovered, with early September total exports reaching close to 4 million barrels per day—about 1 million barrels per day shipped via the Strait of Hormuz and the rest mainly through Yanbu.

However, after at least two facilities along the pipeline were attacked last week, Saudi Arabia shut down the East-West Pipeline. Previous reports indicated that the pipeline was transporting around 4 million to 5 million barrels per day, equating to about 4% of global oil supply.

Reuters reported that Saudi Arabia has not disclosed the specific extent of the pipeline's damage or a recovery timeframe. Market estimates for repairs range from several days to several weeks.

U.S. Secretary of Energy Chris Wright said on Monday he expects the pipeline to resume operations "soon," but AP, citing regional officials, reported that it could take several weeks for the pipeline to be restored.

Increasing Hormuz exports faces tanker shortage, freight rates hit record highs

Therefore, if Saudi Arabia wants to maintain crude exports, it will need to further increase shipments through the Strait of Hormuz. But as Bloomberg noted, this is not an easy task.

On one hand, the Strait of Hormuz itself still faces elevated maritime security risks; on the other, the Middle Eastern shipping market is experiencing a severe shortage of tankers. Although Saudi Arabia owns a large fleet of oil tankers, it also frequently charters additional vessels.

Media reports noted that the cost of transporting crude oil from Saudi Gulf ports to major East Asian countries surged to nearly $1 million per day last Friday, hitting a record high.

Meanwhile, another potential alternative for Saudi oil exports—the Red Sea route—is also being affected by Houthi militant activity. The Houthis have recently advanced along Yemen's western Red Sea coast and are expanding toward the Bab el-Mandeb Strait, putting two critical maritime routes for Saudi energy exports under simultaneous pressure.

Diplomatic mediation over Hormuz falters, planned Monday Iran-Gulf meeting postponed

While Saudi Arabia seeks to increase exports via Hormuz, new uncertainties have emerged regarding ongoing diplomatic efforts to restore shipping through the strait.

Iran and other Gulf countries were scheduled to meet in Oman this Monday to discuss arrangements for commercial shipping in the Strait of Hormuz. Iran previously stated plans to present a routing proposal agreed with Oman at the meeting.

However, on Sunday night, Oman's foreign minister announced the meeting has been postponed. According to Reuters, Iranian diplomatic sources said the decision to delay was made jointly by Iran and Oman at the request of some regional countries; Iran later stated the postponement was at Saudi Arabia’s request.

This has left Saudi Arabia seeking to boost crude shipments through Hormuz and cope with the East-West pipeline shutdown, while also facing delays in regional diplomatic mediation. Reuters reported that the pipeline shutdown on Monday, continued Houthi attacks, and the postponement of the Hormuz meeting collectively pushed oil prices higher, with Brent crude at one point rising above $108 per barrel.