Saudi Arabia plans East-West pipeline restart as crude prices drop below 105 dollars

Pipeline repair plans and market easing

Crude oil and European natural gas prices eased on Thursday following reports that Saudi Arabia plans to restore partial throughput on its East-West pipeline. The kingdom intends to bring roughly half of the pipeline's capacity back online within several days and return to its full 7 million barrel per day capacity within six weeks. On Thursday morning, Brent crude fell 1.63% to $104.10 per barrel, while West Texas Intermediate dropped 1.41% to $100.99 per barrel. Benchmark Dutch TTF natural gas contracts in Amsterdam fell 0.6% to 77.60 euros per megawatt-hour. The pipeline outage followed attacks attributed by Riyadh to Iran-aligned Iraqi militias, which damaged pumping stations 8 and 9 along the 1,200-kilometre corridor connecting eastern fields to the Red Sea port of Yanbu.

European refiners and Polish supply adjustments

The shutdown forced Saudi Aramco to cancel partial crude deliveries scheduled for late September, prompting European refiners to seek spot cargoes. Saudi supplies accounted for 47% of oil delivered to Polish refineries in 2025, and Saudi Aramco typically provides about 40% of the crude processed by Polish refiner Orlen. In response to the disruption, Orlen contracted 16 replacement cargoes from Norway, the United Kingdom, Algeria, Kazakhstan, Azerbaijan, and the Americas for its refineries in Poland, the Czech Republic, and Lithuania. The Polish Ministry of Energy stated that national strategic oil and fuel reserves remain intact and have not been tapped since the wider Middle Eastern conflict began. State Assets Minister Wojciech Balczun addressed the supply strains in a radio interview on Wednesday.

We are doing everything to ensure the stability of oil supplies. Orlen is relatively secured and diversified, which does not mean we can rest on our laurels, because the situation is super serious, we have not had such an extremely difficult and unpredictable situation for many years or decades.

Fiscal response in Poland

Rising pump prices have prompted the Polish government to prepare legislative countermeasures. On Tuesday, the cabinet approved a draft bill introducing a 60% windfall tax on excess profits of energy corporations earned between 1 March and 31 December 2026. The tax applies to revenue exceeding the previous year's average margin plus 20%, with projected budget revenues of 3.8 billion zlotys in 2026 and 200 million zlotys in 2027. Previous editions of Poland's fuel price relief program cost more than 5 billion zlotys. Finance and Economy Minister Andrzej Domański outlined the emergency legislative timeline.

We are working on the bill in express mode to provide funds for a package reducing prices at petrol stations. The situation in the Middle East is worrying, but the messages from Orlen are reassuring. High oil prices persist, which is why we have prepared the most far-reaching package in Europe.

Regional maritime chokepoints and gas inventories

The pipeline disruption occurs alongside shipping constraints across Red Sea transit points and the Strait of Hormuz. Saudi crude exports fell to 3 million barrels per day in August, reaching their lowest level in at least nine years following earlier tanker attacks. In Yemen, Houthi forces advanced along the coast near the Bab al-Mandab Strait, complicating maritime cargo movement. Meanwhile, ongoing hostilities have removed roughly 20% of global liquefied natural gas supplies from the market. European Union natural gas storage facilities are currently 68.7% full, holding 776.91 terawatt-hours, compared to a five-year seasonal average of 84.8%.