Saudi Arabia plans bigger oil route around Hormuz

Saudi Arabia is working to expand the East-West Crude Oil Pipeline, also known as Petroline, to move 10 million barrels of crude a day around the Strait of Hormuz, up from about 7 million currently. Aramco CEO Amin Nasser said the company is also studying additional export routes, while the Saudi energy minister said earlier this month that the expansion could take two to three years. The move is intended to reduce the kingdom’s reliance on the strategic waterway, which the article said had been largely choked off since the US-Israel military attack on Iran on 28 Feb 2026. Energy markets are assessing whether the additional route capacity can reduce the supply risk premium ⚡.

Key points:

• The planned capacity increase is 3 million barrels a day, equivalent to about 43% of the pipeline’s current stated capacity.

• Saudi crude production fell below 7 million barrels a day for much of the war’s first six months, according to the article. The proposed expansion therefore focuses on export flexibility rather than an immediate increase in production.

• OI Charts data for 21 Oct showed Reliance at ₹1,209, up 0.6% on the day and 3.6% over five sessions. Its futures open interest fell 2.7%, indicating short covering, while the put-call ratio was 0.58. The ₹1,250 call strike had the largest call open interest, and the ₹1,160 put strike had the largest put open interest for the 27 Oct expiry.

• OI Charts data showed ONGC at ₹225.62, up 0.3% on the day and 1.3% over five sessions. Its futures open interest rose 0.1%, indicating a long build-up, with a put-call ratio of 0.46. The largest call open interest was at ₹225 and the largest put open interest at ₹220 for the same expiry.

The route expansion could improve the kingdom’s ability to redirect crude exports if disruption around Hormuz persists, but the two-to-three-year timeline means it does not remove near-term supply risks. The former Treasury official cited by Fortune said the plan may have only a limited immediate effect on prices because the extra capacity is not yet available and global oil flows depend on production, storage and shipping access. Oil-linked stocks are therefore sensitive to both geopolitical headlines and the eventual pace of infrastructure execution 🛢️.

Traders will watch further details on the engineering studies, formal project milestones and the status of shipping through Hormuz. For Indian energy counters, the ₹1,210 max-pain level for Reliance and ₹225 max-pain level for ONGC are the near-term options reference points in the 27 Oct expiry, based on OI Charts data.

Source: Fortune, 23 Oct 2026

Not investment advice. For informational purposes only.