Saudi Arabia targets 10 mn bbl / d of crude pipeline capacity outside the Gulf

Saudi Arabia wants to be able to pipe as much as 10 mn bbl / d of crude to destinations outside the Gulf within two to three years, Bloomberg reports, citing Energy Minister Prince Abdulaziz bin Salman. The East-West Pipeline, its main bypass route to the Red Sea, was already moving 5.8 mn bbl / d as of this week, against a total capacity of 7 mn bbl / d.

Qatar could help it get there: Prince Abdulaziz signed an MoU with Doha on Sunday to jointly explore pipelines to transport and export oil and gas, plus cooperation on refining, petrochemicals, and clean hydrogen. He signed it on the sidelines of the International Energy Forum’s ministerial meeting in Riyadh, alongside separate agreements with Egypt on oil and gas trading, transport, and storage, and with Kuwait on a power link, state news agency SPA reports. Routes, costs, and a timeline haven’t been made public yet.

BACKGROUND- The MoU moves forward talks Riyadh opened over the summer. In July, Saudi Arabia was in preliminary talks with Qatar, Kuwait, and Bahrain on adding 1–2 mn bbl / d of capacity.

The fastest barrels could come from a gas line

Riyadh is already squeezing more out of the pipes it has: The Kingdom is upgrading pumping stations along the East-West route, and an existing gas line could be converted to carry around 1.2 mn bbl / d of crude within seven to eight weeks, Bloomberg adds. Further investment could lift that to 3 mn bbl / d.

The conversion would start out temporary, since the line has to go back to carrying domestic gas by May, ahead of summer demand. Aramco is studying a dual-use setup that would let the pipeline switch between oil and gas, using additional pumping and compression infrastructure.

Egypt’s MoU covers the Mediterranean end of the chain: The agreement includes trading, transport, storage, and distribution of crude, refined products, and gas, plus the logistics behind them, according to a statement. Saudi exports through Sidi Kerir, the Mediterranean end of the Sumed pipeline, reached around 2.3 mn bbl / d in August. Most of those barrels go to Europe and the US. For Asian buyers, sending crude around Africa adds about 25 days.

Aramco says rebuilding stocks could take two years

Aramco is working on additional crude oil export routes and more storage overseas, and rebuilding inventories could take as long as two years, CEO Amin Nasser said at the World Petroleum Council Energy Congress in Riyadh. The company’s goal is to limit supply disruptions in coordination with the Energy Ministry, Nasser said.

REMEMBER- Nasser said last month that the oil giant is studying a fourth and a fifth crude-export corridor on top of the three it already uses.

Flows are most of the way back: Middle East crude has recovered to 80-90% of pre-war levels, US Energy Secretary Chris Wright said, with average exports from the Arabian Gulf through the Strait of Hormuz and bypass-pipelines reaching 14 mn bbl / d. “Given the surplus production capacity in the world, and the large stores, that doesn’t make us comfortable but it has made a viable, reasonable price today for oil,” he said.

The strain shows up in stocks: Global onshore commercial oil inventories have fallen below 6 bn bbl, Nasser said, and much of what remains is tied up and can’t be drawn on right away, which limits how far it could cushion a longer disruption. He described the crude problem as “still there but it’s mostly handled.”

The damage to the East-West line showed the value of years of planning, investment, and maintenance, Energy Minister Prince Abdulaziz bin Salman said. He added that “investment must continue” and that resilience depends on preparing for disruptions before they happen. “Our objective is an energy system capable of performing across a range of conditions, with the flexibility to adapt as circumstances change,” he said.

What to watch: Neither the Qatar nor the Egypt MoU has routes or a timeline attached yet, so the nearer-term marker is the gas-line conversion, and whether Aramco’s dual-use setup turns a winter stopgap into permanent oil capacity.