Saudi Arabia Charts Long-Term Energy Policy Through Pipeline Expansion Plan

JEDDAH: Saudi Arabia’s proposed expansion of the East-West Crude Oil Pipeline, known as Petroline, frames energy infrastructure explicitly as an instrument of national resilience and economic policy, not simply an export mechanism.

The expansion under consideration would increase Petroline’s capacity by up to 2 million barrels per day. The nearly 1,200-kilometer pipeline currently links oil fields in the Eastern Province to the Red Sea port of Yanbu, providing a critical export route that circumvents the Strait of Hormuz. An expansion would amplify that function while signaling the Kingdom’s commitment to positioning itself as a dependable global energy supplier amid an increasingly uncertain geopolitical environment. It also sits at the intersection of energy security and the Vision 2030 agenda, which relies heavily on hydrocarbon revenues to finance economic transformation.

Aramco’s operational record this year has already demonstrated the pipeline’s strategic value. The company ramped Petroline to its maximum capacity of 7 million barrels per day during the first quarter, responding to disruptions affecting Gulf shipping routes. In remarks at the company’s August 4 earnings conference, Aramco President and CEO Amin H. Nasser described how the pipeline, combined with storage capacity and export terminals, enabled the company to maintain business continuity despite regional instability. That performance has become a template for how Saudi Arabia views its energy infrastructure: not as a single-purpose asset, but as part of an integrated system designed to withstand shocks.

Energy economist Carole Nakhle, CEO of Crystol Energy, frames the expansion less as a volume-maximization project and more as an investment in strategic flexibility. “The proposed expansion is about much more than increasing export capacity. It is an investment in strategic flexibility,” she told Arab News. By providing an alternative to maritime chokepoints, the pipeline allows Saudi Arabia to diversify its export options, reducing reliance on any single route and strengthening its reputation as a reliable supplier to global markets.

Nakhle cautioned, however, that expanded pipeline capacity alone cannot eliminate supply disruption risks. While additional capacity would reassure markets that a larger share of Saudi exports could reach customers even during shipping disruptions, “diversification reduces risk but does not eliminate it.” She also noted that global demand, competition from other producers, and OPEC+ policy will continue to shape actual export volumes, meaning engineering capacity does not guarantee higher sales. Over the next decade, she argued, competitiveness will depend on the ability to deliver crude “reliably and efficiently under changing market and geopolitical conditions.”

Meanwhile, Yaseen Ghulam, associate professor of economics and director of research at Al-Yamamah University in Riyadh, situates Petroline within Saudi Arabia’s broader economic transformation. He rejects the notion that continued hydrocarbon investment conflicts with diversification, characterizing the two strategies as “mutually reinforcing.” Oil revenues finance much of Vision 2030, making reliable export infrastructure a strategic necessity. A Petroline expansion would safeguard those revenues by enhancing export security and operational flexibility, providing the fiscal stability required to accelerate investment in technology, tourism, manufacturing, education, and renewable energy.

Ghulam also raised the possibility of a regional pipeline network involving Gulf neighbors, which could strengthen economic integration while reinforcing the Gulf Cooperation Council’s collective position as a reliable global supplier. Such a project would require transparent governance arrangements, clear investment responsibilities, transit terms, and revenue-sharing mechanisms. If addressed through a cooperative framework, he said, the initiative could serve as “both an economic and strategic milestone for Gulf cooperation.”

The pipeline’s origins trace to the 1980s Tanker War, when Iran and Iraq targeted oil tankers and commercial shipping in the Gulf. Petroline was designed from the outset to give Saudi Arabia an export route bypassing the Strait of Hormuz. Today it complements broader investments in ports, industrial cities, and logistics zones, strengthening the resilience of both energy exports and trade. The proposed expansion would deepen that integration, positioning the Kingdom as a logistics hub while reducing exposure to geopolitical disruptions concentrated in the Gulf.

Whether the governance structures required for a potential regional network can be agreed upon among Gulf states remains the open question that will determine how far this strategic vision actually travels.