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Posted on 10/05/2026 9:55:30 AM PDT by Merrick
The East-West line is the Kingdom's bypass of the Strait of Hormuz, carrying crude from the eastern fields to Red Sea export capacity, and headlines confirming it is flowing normally tend to appear only when some disruption or threat to Gulf transit is already in the price. In past episodes of Gulf supply anxiety, the market's sensitivity has split between actual interruption to flows, which is rare, and the perceived risk premium around chokepoints, which is common and has historically faded once continuity of throughput is confirmed. Confirmation of normal operations typically works to unwind whatever premium the disruption story had built into prompt spreads and freight, with the first leg of any repricing showing in the front of the curve and in tanker rates rather than in outright flat price. The distinction worth holding is between this line as a redundancy mechanism and as a constraint: its spare capacity has long capped how much damage a Gulf closure scenario can do to Saudi exports, which is why status updates on it carry weight. Follow-ons worth watching are whether the report is contested by other parties, any corresponding move in shipping insurance and Red Sea freight, and whether official Saudi commentary confirms or stays silent. As a sources-based report rather than a statement, it sits one rung below formal confirmation in the usual hierarchy of such news.
(Excerpt) Read more at newsquawk.com ...
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The simple story is: the East-West Pipeline is, as of 05 October 2026, operating at 100% capacity. That's just about 3-1/2 weeks after it was damaged on 10 September 2026.
Doomers - where's the "this administration is lying through their teeth when they say it will only take 4-6 weeks to repair - this won't be running again for many months"?
We always have so many subject matter experts around here ready to weigh in...
Hopefully there will be some new refineries built in the next week or two.................
Notice, the pipeline is damaged, and prices rocket up. The pipeline is fixed. “Well you know, lack of refineries will keep prices high!”
The lack of refineries is the excuse used to keep prices high.
Any excuse to maintain record profits and hand elections to morons
The pipeline is back open. Ship traffic is back to pre-war level.
Oil prices are still $90+
Why?
You’re *NEVER* going to see another refinery built in America if Democrats win this election. Too bad few people seem to understand that and the fact that refineries are the primary driver of gas and diesel prices right now, not crude prices.
But it will be a year or two for a new refinery, minimum, even if Republicans maintain majorities. There will be endless litigation, etc. And there are people out there who think, “gee, let’s give Dems a chance again, because I can’t remember 2021-2024.
It’s not an excuse. American refineries have been running at 95% capacity since Newsom closed the Valero Benicia refinery in April 2026. Do you think they can run at 120%? Did you pass 3rd grade math?
Could new refineries be built in an expedited manner using national security needs to strwamline the usual delays?
Speculation and insurance costs. The market prices aren’t only driven by availability.
Not if you vote Democrat, or sit this election out.
We built whole new factories during WW2. Built through the govt, operated by the private sector, sold off to the private sector after the war. Being that energy is a defense issue, we could do the same thing.
A new one is almost done in Texas. Can’t say if one new refinery will make a big difference or if we need multiple.
Gas prices are simmering down some by me. Down 25 cents from 3 weeks ago.
Eeyores are saddened.
The red tape, at one time, would weigh more than the new refinery. With all the lib judges, the eco warriors would keep it locked up for a long time. But, one would think. Then again.......🤬
No, I don’t think that. But they raise prices immediately. They should lower prices immediately when crude prices fall. They shouldn’t have it both ways. The oil they are refining today was probably paid for probably two months ago.
The oil companies like a constricted market. It allows them a higher profit margin.
And no, you’re not going to convince me that they aren’t price gouging because they have a monopoly
You’re right - but crude is still pretty high - I think you said so yourself. Also, more than 2/3 of cost increases in 2026 are the result of refinery margins - because Newsom’s closures (in April 2026 as already mentioned, plus he closed a major refinery in December 2025 - Phillips 66 Los Angeles) have pushed refineries to the limit - they had been running at 98% all Summer, and cut back to 94% in September - but not because they wanted to - because mandatory maintenance schedules came into play. Less than 1/3 of price increases are as a result of crude increases.
So, yes, gasoline went up about $1.75 compared to before the war - but crude could go to $60/barrel and that won’t get it down by about $0.75 at most, it that, as long as the refineries are working at max. You expect to get paid when you work. To operate at 98% for months on end you have to pay crews overtime, you have to put maintenance on overtime. etc. I’m not trying to defend refinery operators, but you can’t throw them under the bus, either.
See here - hard numbers with the data behind them: https://freerepublic.com/focus/f-news/4397154/posts
You might ask yourself why Newsom would close down more than 1/3 of California diesel refinery capacity in an election year. Gee - i wonder why.
For one, you don’t have that quite right. Ford built the B-24 Liberator plant at Willow Run. The government didn’t build it. It was cooperative, but DEFINITELY NOT the government building plants for business.
The other - Democrats we on Republicans’ side fighting Fascism in WW2. They’re not on our side today. They have fought every possible move that would make America stringer and more competitive at every step for at least 40 years, if not longer. It’s only way more obvious the past 15-20 or so.
It’s a start. There’s a HUGE difference between refineries operating at 90% margin and refineries operating at 98% margin. IT a step in the right direction, but not far enough. We should be producing twice what we need and selling half overseas.
That’s low based on history.
In 2008 it hit $147.
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