Understanding the East-West corridor and its significance
The vital East-West pipeline in Saudi Arabia, which transports about 7 million barrels per day from Bqeq to Yanbu, was targeted in a drone attack coming from Iraq. The attack caused injuries and damages, leading to the pipeline being temporarily shut down for safety inspections. Despite its halt, this does not mean a complete loss of capacity or production, as the pipeline is capable of operating at maximum capacity of up to 7 million barrels per day. However, actual flows have been lower, with estimates ranging between 2.9 and 3.7 million barrels per day prior to the attack. The pipeline represents a strategic investment, especially amid decreasing maritime traffic through the Strait of Hormuz, as it provides a land route for transporting Saudi oil to the Red Sea coast and exporting it via the Red Sea. This enhances Saudi Arabia’s flexibility in oil exports and reduces its dependence on the Strait of Hormuz. Nevertheless, it faces increasing risks as regional tensions escalate. The continuation of the shutdown depends on the assessment of damages and the time required for repairs; details regarding the extent of the damages and the impact of the shutdown have not yet been publicly disclosed.
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