Sept. 22 (UPI) — The price of oil was on the decline Tuesday with news that Saudi Arabia plans to restart a pipeline that was damaged by Houthi attacks earlier this month.
West Texas Intermediate crude oil was hovering around $90 per barrel as of Tuesday morning while Brent crude, the international benchmark, dropped by 2% to about $98 per barrel. Brent crude had recently peaked at about $109 barrel after Saudi Arabia was forced to shut down its East-West pipeline.
Saudi Arabia plans to restart the pipeline, potentially later this week. The pipeline is currently undergoing testing.
The East-West pipeline has been critical for the oil trade during the Iran war as it allows Saudi Arabia to circumvent the Strait of Hormuz, exporting through the Red Sea.
The 750-mile pipeline network transports oil from fields along the Persian Gulf to ports on the Red Sea.
The Houthis, an Iran-backed rebel group, has expanded its control of the Yemeni coast along the Red Sea, taking control of the Bab al-Mandab Strait, straining a critical chokepoint in the Middle East oil trade.
Disruption of the Saudi pipeline accelerated the rise in oil and gas prices globally. On Tuesday, the national average price of gasoline in the United States reached $4.48 per gallon, AAA reports. That is a 50% increase since the war started on Feb. 28.
Diesel prices have ballooned even more, with the average price at $6.52 per barrel in the United States, nearly a $3 increase over a year ago. Drivers in California are paying an average of $8.43 per barrel for diesel, the highest prices in the country.
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