Saudi Arabia has restarted operations at its East-West Pipeline and could resume exports from the Red Sea port of Yanbu later today, three sources briefed on the matter said.
Drone attacks forced Saudi Arabia to shut its East-West Pipeline on 13 September, halting crude loadings at the kingdom's Yanbu port.
The resumption of supplies helped to drive selling on global oil markets, traders said.
Brent crude futures fell by more than $2 a barrel to its lowest since 8 September.
Since disruption to oil flows through the Strait of Hormuz following the US-Israeli war on Iran, OPEC's leading oil exporter has been using the pipeline to reroute around 4 million barrels per day - around 4% of global supply - to Yanbu.
The pipeline was pumping at a low rate after its restart, two of the sources said.
State oil firm Saudi Aramco did not immediately respond to a request for comment.
One of the sources said Aramco was seeking to get the pumping rate back to 4 million bpd, while a security source said full resumption could take weeks.
The pipeline will resume crude supply to Aramco refineries located on the Red Sea coast, one of the sources said, adding that one cargo was scheduled to load at Yanbu later today.
The source said it would be bound for China.
Another two trading sources said traders were getting ready for Saudi oil loadings by moving tankers to Egypt's Mediterranean Port Said for ship-to-ship transfers and also to Sidi Kerir.
It comes as the foreign ministers of the G7 condemned the "unacceptable continued strikes" waged from Yemen against Saudi Arabia and urged the Iran-backed Houthi rebels to immediately hold fire.
"We call on the Houthis to immediately cease all military actions, all threats and attacks against civilian shipping, and to return to the political process in good faith," the leaders representing Canada, France, Germany, Italy, Japan, the United Kingdom and the United States said in a statement.
They also called on Iran "to end its arming of and support for the Houthis," alleging Iran is in violation of past UN Security Council resolutions.
Fighting in Yemen between the Houthis and government forces supported by Saudi Arabia has killed 154 people in the past two days, military sources from both sides said today.
"The death toll from Saudi airstrikes, clashes and artillery fire in the governorates of Taiz, Al-Jawf, Marib and Saada stands at 118," Houthi military sources said, while government sources reported 36 killed in their ranks.
Earlier, Saudi strikes on the strategic Red Sea port city of Mokha killed at least six people and wounded eight others, the Houthi-affiliated news agency Saba reported.
Yemen's Iran-backed Houthi movement has staged a lightning offensive in recent weeks to take over Yemen's entire Red Sea coast, including Mokha, leaving the Saudi-backed government scrambling to respond.
The head of Yemen's governing body Rashad al-Alimi held a call with US President Donald Trump to request US support against the pro-Iranian fighters, a source in Mr Alimi's office said.
Mr Trump did not promise military support, the source said, adding that the call took place on Sunday and was intended as a show of solidarity with Yemen's embattled government.
US media has reported that Saudi Crown Prince Mohammed bin Salman has also urged Mr Trump to strike the Houthis.
Yesterday, media reports said that British Prime Minister Andy Burnham agreed to give military support to Saudi Arabia.
Tehran hints at Hormuz talks with US as leaders gather at UN
Meanwhile, a senior Iranian official has said that Iran could reopen the Strait of Hormuz to Gulf shipping within days if the US lifts its blockade, describing a gathering at the UN as a "golden opportunity" to renew diplomacy with Washington.
US President Donald Trump and Iranian President Masoud Pezeshkian are both due to attend the UN General Assembly in New York, the first time they will be at the same event since Mr Trump launched "Operation Epic Fury" against Iran in February.
The Iranian official said Iran's delegation had full authority to revive talks, although no direct meetings between the two presidents were planned.
No face-to-face meetings between Iran and the United States are known to have taken place since July, when an agreement on an interim deal to end the war collapsed just weeks after it was signed by Mr Trump and Mr Pezeshkian.
"The US needs to announce that it wants to resolve the issue diplomatically, make that official, and then agree on a timeline for how the process will move forward," the Iranian official said.
"The UN General Assembly is a golden opportunity for the US to return to diplomacy," the official said. He said Iran had sent its latest proposal to Washington via mediators on 16 September.
US Secretary of State Marco Rubio told NBC's "Today" show the US was open to speaking with the Iranians at the General Assembly, "especially if it has the prospects of leading to something positive and ultimately achieving the goal of what this is all about".
Mr Trump is due to meet with the leaders of the six Gulf Arab states: Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.
The Gulf countries are keen to restore shipping through the Strait of Hormuz but wary of giving their longstanding rival Iran too much power.
All apart from Oman host huge US military bases that have come under repeated Iranian attack throughout the war, which has strained their decades-old security partnerships with Washington.
