Following the closure of a key bypass pipeline, Saudi Arabia is reportedly seeking to increase crude oil exports through the Strait of Hormuz.

Saudi Arabia is seeking to further increase crude oil exports via the Strait of Hormuz to offset the impact of the attack on a key bypass pipeline.

On Monday, September 14, Eastern Time, Bloomberg, citing sources familiar with the matter, reported that Saudi Arabia's crude oil shipments through the Strait of Hormuz had increased in the first 10 days of this month compared to August, and the country is now seeking to further increase crude oil supplies passing through the strait.

Also on Monday, US President Trump signaled a willingness to engage with Iran. He posted on his social media account that Iran is "eager to make a deal and desperately needs a deal, and I will decide whether the United States chooses to participate—we are open to it."

Trump's remarks came after a meeting between Iran and other Gulf states, scheduled for Monday in Oman, was postponed, marking a setback in diplomatic efforts to restore shipping in the Strait of Hormuz. Iran said the postponement was at the request of Saudi Arabia.

For Saudi Arabia, the impetus for increased exports from the Strait of Hormuz is the forced closure of a key oil pipeline, originally intended to bypass the strait, after it was attacked last week. This pipeline was a major route for Middle Eastern oil to bypass the Strait of Hormuz.

The east-west oil pipeline previously transported up to 5 million barrels of crude oil per day.

Last week, Saudi Arabia announced the closure of the East-West Pipeline, which had been a vital lifeline for Saudi Arabia to maintain crude oil exports after risks in the Strait of Hormuz escalated.

This pipeline, which is about 1,200 kilometers long, crosses the Arabian Peninsula, connecting Saudi Arabia’s eastern oil fields with Yanbu Port on the Red Sea coast. It has a maximum transport capacity of 7 million barrels per day, of which about 5 million barrels of crude oil can be exported and the rest will be used by refineries on the Red Sea coast.

After the outbreak of the war with Iran, Saudi Arabia quickly activated this pipeline to divert some of its crude oil from the Persian Gulf to the Red Sea for export, thereby reducing its dependence on the Strait of Hormuz.

Bloomberg reported that Saudi Arabia's daily crude oil exports fell to about 3 million barrels in August, the lowest in at least nine years. Exports gradually recovered in September, with total exports approaching 4 million barrels per day in early September. Of these, about 1 million barrels per day were exported through the Strait of Hormuz, and the rest were mainly exported through the port of Yanbu.

Saudi Arabia shut down its east-west oil pipeline after at least two facilities along the pipeline were attacked last week. Previous reports indicated the pipeline carried approximately 4 to 5 million barrels of crude oil per day, equivalent to about 4% of global oil supply.

Reuters reports that Saudi Arabia has not specified the extent of the pipeline damage or the recovery time, with market estimates ranging from several days to several weeks.

U.S. Energy Secretary Chris Wright said Monday that he expects the pipeline to be back online “soon”; however, the Associated Press, citing regional officials, said the pipeline could take weeks to restore.

Hormuz's increased exports face tanker shortages and record freight rates.

Therefore, if Saudi Arabia hopes to maintain its crude oil exports, it needs to further increase the volume of shipments passing through the Strait of Hormuz. However, Bloomberg points out that this will not be easy.

On the one hand, the Strait of Hormuz itself still faces high shipping security risks; on the other hand, the Middle East shipping market is facing a severe shortage of oil tankers. Although Saudi Arabia has a large oil tanker fleet, it also frequently charters vessels from outside.

Media reports indicate that the cost of transporting crude oil from Saudi Arabia's Persian Gulf ports to the East Asian power reached nearly $1 million per day last Friday, a record high.

Meanwhile, another potential alternative route for Saudi crude oil exports—the Red Sea route—has also been affected by Houthi activities. The Houthis have recently advanced along Yemen's western Red Sea coast and expanded towards the Bab el-Mandeb Strait, putting Saudi energy exports under pressure on two important maritime routes simultaneously.

Hormuz's diplomatic efforts have faltered, and the Iran-Gulf summit originally scheduled for Monday has been postponed.

As Saudi Arabia increases exports from the Strait of Hormuz, new uncertainties have arisen in diplomatic efforts to restore shipping through the Strait.

Iran and other Gulf states were scheduled to meet in Oman this Monday to discuss arrangements for commercial shipping through the Strait of Hormuz. Iran had previously stated its intention to present the Hormuz shipping agreement reached with Oman at the meeting.

However, Oman's foreign minister announced Sunday evening that the meeting was postponed. Reuters reported that Iranian diplomatic sources said the postponement was a joint decision by the Iranian and Omani governments due to requests from some regional countries; Iran later stated that the postponement was at the request of Saudi Arabia.

This has left Saudi Arabia facing a dilemma: while seeking to increase crude oil shipments through the Strait of Hormuz to address the shutdown of east-west pipelines, it also faces delays in regional diplomatic efforts. Reuters reported that on Monday, the Saudi pipeline shutdown, continued Houthi attacks, and the postponement of the Hormuz meeting all contributed to the rise in oil prices, with Brent crude briefly climbing above $108 per barrel.

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