Saudi West Coast exportable volume rises to a wartime high! Key pipeline transports nearly 6 million barrels per day, Brent crude falls below $100.

Saudi Arabia, the Middle East's largest oil producer, has raised crude shipments through its key trans-country pipeline to more than 80% of capacity. As it reduces crude supplies to domestic refineries, the volume of crude available for export from its west coast has reached its highest level since the outbreak of the U.S.-Iran war in late February. With the pipeline's restoration, together with expectations of a global oil reserve release pushed by French President Emmanuel Macron, easing supply anxiety, the market has begun to reassess the crude scarcity premium and energy cost pressures. A person familiar with the matter said Saudi Aramco, the kingdom's largest state-owned enterprise and one of the world's largest energy giants, is now transporting close to 6 million barrels per day of crude through the East-West pipeline. The person asked not to be identified because the information is non-public. After deducting crude supplied to refineries on Saudi Arabia's west coast, the company currently has about 4.5 million barrels per day available for export, the person said. Saudi Aramco and the Saudi Ministry of Energy did not respond to requests for comment outside normal working hours. Earlier this week, the pipeline, which has a capacity of 7 million barrels per day, was still operating at only about half its capacity before the company quickly increased throughput. During the Iran war, the pipeline has been a vital channel for maintaining crude exports, allowing Saudi Arabia earlier this year to export nearly 4 million barrels per day via the Red Sea without relying on the dangerous voyage through the Strait of Hormuz. However, this route has come under pressure in recent months. Last month, the pipeline stopped operating after being hit by a projectile fired from Iraqi territory. As shown in the chart above, Saudi crude shipments rose in September to close to the 2025 average as traffic through the Strait of Hormuz surged. Note: September data cover only the first 23 days of the month. Source: ship-tracking data compiled by Bloomberg. Saudi Arabia responded to the pipeline outage by sharply increasing shipments through the Strait of Hormuz in recent weeks. Shipments also resumed at Yanbu port on the Red Sea, the terminus of the East-West pipeline. JPMorgan and Goldman Sachs estimate that these factors combined have driven Saudi Arabia's crude shipments and helped lift overall Middle East oil exports sharply back toward pre-war levels. The increase in overall exports helped push oil prices lower this week, with Brent crude in London finally falling below $100 a barrel on Friday. As the United States sends an additional aircraft carrier and troops to the Middle East, futures traders in commodity markets are also actively watching the risk of a possible escalation of hostilities in the region. Saudi Arabia opens the "crude pressure relief valve" Saudi Arabia's crude transport capacity bypassing the Strait of Hormuz is being released at an accelerating pace, becoming an important supply backdrop for the pullback in oil prices before today's U.S. stock market open. Actual throughput on the East-West pipeline has risen from about half load earlier this week to close to 6 million barrels per day, equivalent to about 86% of its nominal capacity of 7 million barrels per day; after deducting supplies to west coast refineries, about 4.5 million barrels per day of crude is available for export, the highest level since the war began. At the same time, Saudi Arabia's earlier increase in Hormuz shipments and the resumption of loading at Yanbu port have complemented each other, strengthening the resilience of crude exports. However, an accurate distinction is needed: 4.5 million barrels is the volume of crude available for export, not yet the volume already loaded, departed, or delivered. The recovery in supply, together with Europe's discussion of releasing reserves, combined to push down pre-market energy prices. At 20:02 Beijing time on October 2, Brent crude futures were at $99.78 a barrel, down 2.47%; WTI was at $89.55 a barrel, down 3.57%. Europe's diesel benchmark futures fell about 4.1% over the same period to $1,390 a ton. Based on the settlement prices on February 27, the last trading day before the war broke out on February 28Brent at $72.48 and WTI at $67.02the two are still up about 37.7% and 33.6%, respectively, from pre-war levels. This means the market is lowering the supply disruption premium, but prices have not yet returned to pre-war levels. However, military and shipping risks still coexist. The United States is sending a third carrier strike group and about 9,000-10,000 personnel to the Middle East; Iran is maintaining diplomatic channels while preparing a broader response in case the United States resumes large-scale strikes. Although more tankers are transiting Hormuz, three tankers were still reported hit by unidentified projectiles on September 29; fighting continues in southern Red Sea Yemen, and on October 2 government forces announced 20 airstrikes on Houthi targets in Taiz. The more accurate market narrative at present may be described as "crude export recovery coexisting with shipping risks," and the sustainability of the supply improvement is being tested. The "crude relief line" moves forward, while refined products and global rates still await easing This recovery involves both faster pipeline flows and a reallocation of crude between domestic refineries and exports. Media reports did mention that Saudi Arabia reduced supplies to domestic refineries, increasing the crude available for export on the west coast. Therefore, after global markets receive more crude, it still depends on whether refineries at the receiving end can process it into products such as diesel and jet fuel. Reducing oil deliveries from a certain pipeline to refineries also cannot directly lead to the conclusion that Saudi Arabia's nationwide refining volume has declined, because refineries may use other sources or inventories. The IEA previously reported that due to capacity maintenance and war damage to refining capacity in the Middle East and Russia, global refinery throughput in August fell by 4.2 million barrels per day year-on-year, enough to show that the refining segment itself remains a supply constraint. Transport routes also need to be assessed separately. The East-West pipeline sends crude to Yanbu port on the Red Sea, allowing it to bypass Hormuz; but shipping south from Yanbu to Asia still faces security risks at the Bab el-Mandeb Strait, while going north through Suez to Europe does not require passing through Bab el-Mandeb. The latest progress in restoring Saudi pipeline flows has increased route optionality, but final export realization still depends on loading, insurance, and safe navigation. The "crude relief line" is moving forward, while the "fuel relief line" still depends on refining and cross-border delivery. If crude prices fall while the diesel crack spread relative to crude remains elevated, it means the supply improvement has not yet been fully transmitted to end-user fuel costs. Global long bonds have already seen some repair, but remain in a high-yield range. Verifiable quotes before the nonfarm payrolls release show the U.S. 10-year Treasury yield at about 5.22%, below the 5.34% briefly touched on October 1; the U.K. 10-year was about 5.33%, and the 30-year also retreated after previously breaking above 6%; Japan's 10-year was about 3.11% and the 30-year about 4.21%, still at high levels. Cooling oil prices helps ease inflation and rate-hike expectation pressures, but Japan's policy normalization, fiscal supply across countries, and real capital demand will still affect long-end rates. For optimistic expectations of a global AI bull market, the investment significance of this transmission chain is that if improved energy supply in the Middle East can continue to lower end-user cost pressures, it may cool the "anchor of global asset pricing," reducing the financing threshold for AI capital expenditure and the valuation discount pressure on tech stocks.