Saudi Arabia reopens East–West pipeline to Red Sea, easing VLCC demand

Saudi Arabia restarted its East–West Pipeline on September 22, reopening a key overland route for crude to the Red Sea that bypasses the Strait of Hormuz, a move that could ease recent pressure on the VLCC tanker market. The pipeline, shut down after drone attacks, had forced Saudi Aramco to shift more exports to Persian Gulf terminals, boosting demand for large tankers amid Hormuz disruptions. The restart is gradual, with limited volumes for now, and its impact depends on how quickly flows to Yanbu increase. If Aramco significantly boosts pipeline volumes, some VLCCs used for extraordinary Saudi export handling could return to the broader market, potentially softening freight rates. However, rates remain supported by vessel scarcity, delays, war risk, and ongoing Hormuz disruption, so the rally is not over yet.