Saudi Arabia Weighs 2-MMbpd Expansion of East-West Oil Pipeline
Saudi Arabia is considering expanding its East-West crude oil pipeline by up to 2 MMbpd, a move that could strengthen Gulf oil exports by reducing reliance on the Strait of Hormuz while creating new capacity for neighboring producers.
(P&GJ) — Saudi Arabia is considering expanding the capacity of its East-West crude oil pipeline by up to 2 million barrels per day (MMbpd), according to multiple sources, a move that would increase the kingdom's ability—and potentially that of neighboring Gulf producers—to export crude without transiting the Strait of Hormuz.
The pipeline, built in the early 1980s, has become a critical export route since shipping through the Strait of Hormuz was disrupted following the outbreak of the Iran war in February.
The East-West pipeline currently transports up to 7 MMbpd of crude oil from eastern Saudi Arabia to the Red Sea port of Yanbu. According to Aramco Chief Executive Officer Amin Nasser, about 2 MMbpd supplies refineries on Saudi Arabia's west coast, while approximately 5 MMbpd is available for exports.
Saudi Arabia has begun preliminary discussions with neighboring countries about increasing the system's capacity by 1 MMbpd to 2 MMbpd, sources said. It remains unclear whether the expansion would involve upgrades to the existing pipeline or construction of new infrastructure. One source said the proposal could include a second, smaller pipeline for refined petroleum products.
The potential expansion would also create additional export options for neighboring producers that currently lack routes bypassing Hormuz. Kuwait, Bahrain and Qatar depend heavily on the waterway for crude and LNG exports, while Iraq's export pipeline to Turkey continues to operate below capacity because of ongoing disputes and repeated shutdowns.
Kuwait Petroleum Corporation Chief Executive Officer Sheikh Nawaf Al-Sabah said the country is already discussing additional pipeline capacity with Saudi Arabia.
"We are in discussions with our brothers in Saudi Arabia and in the emirates to look at how to expand the pipeline system that they have to accommodate Kuwaiti barrels," Al-Sabah said last month at the Atlantic Council Global Energy Forum.
Sources said the proposed expansion would likely require several years to complete, cost billions of dollars and could require changes to Saudi Arabia's crude pricing system.
The renewed interest in expanding regional pipeline infrastructure follows months of disruption in Gulf energy exports. Iran's blockade of the Strait of Hormuz forced producers to shut in as much as 12 MMbpd, although exports have partially resumed following a preliminary U.S.-Iran agreement reached last month.
Zaid Belbagi, managing partner at Hardcastle Advisory, said recent discussions reflect a broader reassessment of regional energy security.
"The recent talks about new pipeline corridors involving Saudi Arabia, Kuwait and Qatar reflect a broader strategic reality," Belbagi said. "The conflict has focused minds regionally on the perils of relying solely on Hormuz."
Aramco declined to comment. Saudi Arabia's government, Bahrain, Iraq and QatarEnergy did not immediately respond to requests for comment.
Qatar is also evaluating alternative export routes for LNG, including potential connections through Saudi Arabia, according to three sources.
Meanwhile, the United Arab Emirates continues work on expanding its own bypass infrastructure. The country has completed roughly half of a new west-east pipeline that will eventually double crude export capacity to Fujairah, complementing its existing pipeline, which currently transports up to 1.8 MMbpd.