Orlen scrambles for crude as Saudi pipeline shutdown cuts deliveries

Poland's Orlen has issued at least five crude oil purchase tenders in the past two working days, according to Bloomberg, as the Central European refiner moves to secure alternative supplies following the shutdown of Saudi Arabia's East-West Pipeline after drone strikes last week.bloomberg

Sharp Drop in Saudi Deliveries

Shipping data from LSEG shows Saudi crude cargoes scheduled to move from Egypt's Sidi Kerir terminal to Poland's Gdansk port have fallen steeply — from 6.6 million barrels across 10 tankers in August to just 2.1 million barrels across three tankers this month, including two provisional deals. Saudi Aramco supplies roughly 40% of the oil processed by Orlen, the largest listed energy company in Central and Eastern Europe.reuters

Orlen said feedstock deliveries to its refineries were "proceeding without disruption" and that it "consistently diversifies its supply sources and expands its own upstream operations," though the company did not directly address the decline in Sidi Kerir shipments. MarineTraffic vessel-tracking data showed crude tankers from the U.S., Algeria and Norway already heading to Gdansk, which feeds Orlen's local refinery and its largest plant in Plock, with a combined capacity of 486,000 barrels per day.reuters

Pipeline Shutdown Compounds Supply Pressure

Saudi Arabia temporarily shut the roughly 750-mile East-West Pipeline, also known as the Petroline, on September 11 after a series of drone strikes launched from Iraqi territory hit pumping stations in the Riyadh and Medina regions. Satellite images published Sunday showed extensive fire damage around one of the pumping stations. The pipeline, which transports crude from Abqaiq on the Gulf coast to the Red Sea port of Yanbu, has served as a critical alternative export route while the Strait of Hormuz remains effectively disrupted amid the wider conflict with Iran.cnbc+1

Part of the crude reaching Yanbu is shipped onward through Egypt's SUMED pipeline to Sidi Kerir for European buyers including Orlen. With the East-West Pipeline offline, Yanbu will have to draw on storage inventories that industry sources estimate could sustain exports for only five to seven days.reuters

Diversification Efforts Already Underway

Orlen had already taken steps to broaden its crude supply base before the latest crisis. In August, the company signed a three-year agreement with Equinor ↘ 2.93% to receive crude from Norway's Johan Sverdrup field, with deliveries beginning in September and contracted volumes reaching up to 9 million tonnes per year — equivalent to roughly one-quarter of the group's annual crude demand. Oil prices rose more than 2% on Monday as the pipeline shutdown and fresh strikes on shipping in the Middle East compounded supply concerns.orlen+2