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Saudi Aramco Halts Next Month's Crude to European Refiners

3 hours ago

Saudi Aramco told European refiners they will get no crude next month after a drone attack shut its East-West Pipeline to the Red Sea.

Saudi Aramco has told at least two of its European refining customers that no crude oil shipments will reach them next month, following an attack that forced the shutdown of a major pipeline linking the kingdom to the Red Sea, Bloomberg News reported on Friday.

European buyers usually draw Saudi crude through term contracts that lock in a fixed monthly volume. Those cargoes will not be delivered next month, and the suspension covers every European customer, people with knowledge of the plans said.

The disruption stems from damage to Aramco's East-West Pipeline, a 1,200-km (745-mile) line that crosses the Arabian Peninsula. Satellite imagery and three industry sources cited on September 17 showed that three pumping stations were hit in last week's attack - one more than earlier estimates had found.

Saudi authorities closed the pipeline after the strike, which the government attributed to drones fired by Iranian-backed militias operating in Iraq.

With the route offline, several Aramco clients are racing to line up other sources of crude. Poland's Orlen SA has floated more than 10 tenders since Friday in its search for replacement barrels.

The stakes are considerable for Europe. OECD countries on the continent bought 577,000 barrels a day of Saudi crude in June, according to the International Energy Agency's monthly Oil Market Report.

The pipeline had grown into the primary substitute channel for Middle Eastern oil over the past six months, a period in which the Strait of Hormuz has stayed largely shut because of the war. It had been moving 4 million to 5 million barrels of crude daily - roughly 4% to 5% of the world's supply - allowing Saudi Arabia to sidestep much of the damage that has hit other Gulf oil and gas exporters.

Saudi Aramco, East-West Pipeline, European refiners, crude oil supply, Orlen SA, Strait of Hormuz, Iranian-backed militias, oil market

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