Saudi Arabia is in preliminary talks with neighbouring Gulf states about expanding the capacity of its East-West crude pipeline by up to 2 million barrels per day, a move that could permanently reshape how the region exports oil after months of disruption through the Strait of Hormuz.
Built in the early 1980s, the existing pipeline runs from Saudi oil fields to the Red Sea port of Yanbu and can carry up to 7 million bpd, of which roughly 5 million bpd is available for export after west coast refineries take their share. The proposed expansion would add meaningful headroom for Saudi crude and potentially open the corridor to barrels from Kuwait, Qatar and other neighbours that lack any credible route around Hormuz.
Kuwait Petroleum Corporation CEO Sheikh Nawaf al-Sabah confirmed the discussions at the Atlantic Council Global Energy Forum last month, saying the country is exploring how to route Kuwaiti barrels through Saudi and Emirati pipeline infrastructure.
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Two sources familiar with the talks said a capacity addition somewhere between 1 and 2 million bpd is under consideration, with refined products also being factored in.
The backdrop is a Gulf energy sector still recovering from the shock of Iran’s blockade of the Strait of Hormuz. The closure forced producers to shut in as much as 12 million bpd and sent oil prices surging, and while flows have partially resumed following a preliminary U.S.-Iran deal, they remain below pre-war levels. Iraq’s output, which stood at 4.3 million bpd before the crisis, plunged to below 1.5 million bpd by May. Kuwait was compelled to declare force majeure in March, and Bahrain’s Sitra refinery sustained damage after coming under Iranian missile attack on multiple occasions.
The absence of independent bypass routes for Kuwait, Bahrain and Qatar has given the expansion talks added urgency. Qatar, primarily an LNG exporter, faces greater technical hurdles and is weighing several alternatives, including routing through Saudi Arabia.
Any expansion would not come quickly. Sources say the project would span several years, carry a price tag in the billions, and necessitate adjustments to Saudi crude pricing mechanisms. Whether it would involve upgrades to existing infrastructure or an entirely new pipeline remains unclear, though one source said the plan would include a smaller secondary line for oil products.
The UAE is the only other Gulf producer with meaningful bypass capacity. A new West-East pipeline, already half built, is set to double crude throughput to Fujairah when it comes online next year. One industry source noted that a Saudi expansion combined with that buildout could set the stage for a post-war production race between Riyadh and Abu Dhabi, with price implications for the broader market.
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