Saudi Arabia is preparing to resume crude oil exports from the Red Sea port of Yanbu as early as Tuesday, according to people familiar with the matter, in another sign that the kingdom is gradually restoring its disrupted oil export infrastructure. Several Asian refiners have reportedly been informed by Saudi Aramco that they will soon be able to collect crude from Yanbu again.
The development follows the shutdown of Saudi Arabia’s East-West oil pipeline after drone attacks earlier this month. The pipeline connects the kingdom’s major oil-producing areas in the east with Yanbu on the Red Sea coast, allowing Saudi Arabia to export crude without relying on the Strait of Hormuz. Its maximum capacity is around 7 million barrels per day.
The disruption had created a significant threat to global oil supplies. The restart of Yanbu exports is therefore important for the oil market because it further eases supply fears. Oil has already fallen sharply from its recent highs as markets had been pricing in improving Saudi export flows alongside growing hopes of diplomatic progress between the US and Iran.
The bearish news for crude oil just can’t stop coming. WTI oil is now trading below the $90 level in the fifth consecutive negative day. The next technical target is the lower bound of the channel around the $85 handle.
This article was written by Giuseppe Dellamotta at investinglive.com.