Oil: Saudi pipeline outage supports prices – ING
ING analysts Warren Patterson and Ewa Manthey note that Oil prices have surged as the Saudi East–West pipeline shutdown tightens supply and keeps ICE Brent near recent resistance around $110/bbl. They highlight persistent uncertainty over damage and outage duration, with Saudi storage at Yanbu only offering temporary relief and risks that port stocks deplete before flows resume, leaving prices well supported in the near term.
Saudi outage keeps Brent supported
"Oil prices surged yesterday amid broader escalation in the Middle East and the shutdown of Saudi Arabia’s 7m b/d East-West pipeline. ICE Brent traded to an intraday high of just below $110/bbl, a level at which the market has faced tough resistance over the last 3 days."
"Plenty of uncertainty remains over the extent of damage and the duration of the outage for the East-West pipeline in Saudi Arabia. Prices are likely to remain well supported until we get clarity."
"Reports suggest the pipeline could be offline for several weeks. The Saudis have oil in storage tanks at Yanbu, which should sustain exports for several days."
"The risk is that port stocks run out before the pipeline resumes. Some suggest the Saudis are looking to increase exports via the Strait of Hormuz amid the pipeline outage."
"Given the disruptions in the Strait of Hormuz, that may be easier said than done. Despite Trump stating that Russia and Ukraine agreed to halt hitting each other’s energy infrastructure, we’ve seen little relief in middle distillate cracks."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
