Saudi Aramco cancels European oil shipments after pipeline attack

Saudi Aramco has canceled or delayed crude oil deliveries to European refiners after a drone attack on September 10 knocked out the kingdom's East-West pipeline, severing one of its last export routes that bypasses the Strait of Hormuz and effectively removing Saudi Arabia from the European market for the remainder of September.

At least three European refiners have had late-September cargoes canceled or pushed as far out as November, with two more expecting similar notices, according to market sources cited by Argus. Oil loadings at the Red Sea port of Yanbu have been suspended, and no Saudi crude has departed the terminal since September 11, Vortexa data showed.oilprice+3

A Critical Route Goes Dark

The 7-million-barrel-per-day East-West pipeline, also known as Petroline, stretches roughly 1,200 kilometers from Saudi Arabia's eastern oil fields to Yanbu on the Red Sea. It had become one of the kingdom's most important alternatives for maintaining exports during the months-long disruption to shipping through the Strait of Hormuz caused by the broader Iran conflict.marketscreener+1

One market source warned that every Saudi cargo scheduled for the final 10 days of September could be at risk, estimating that Yanbu's remaining crude inventories amounted to roughly five days of supply. Saudi Arabia blamed the attack on Iraqi militia, according to Reuters. The disruption contrasts sharply with assurances given in August, when Bloomberg reported that Aramco planned to supply full contractual volumes to European buyers for September.turkiyetoday+2

Scramble for Alternatives

Poland's Orlen, which relies on Aramco for roughly 40% of the crude processed at its refineries in Poland, Lithuania, and the Czech Republic, moved quickly to secure replacement barrels. The company purchased North Sea grades including Grane, Johan Sverdrup, and Johan Castberg through spot tenders and sought offers for U.S. WTI Midland and Kazakhstan's CPC Blend, Reuters reported. At least four September tanker fixtures from Egypt's Sidi Kerir terminal to Poland's Gdansk port failed. Orlen said its refineries continue receiving feedstock.thedeepdive+1

The supply disruption pushed Brent crude futures near $108 a barrel, with physical cargo prices in Europe climbing even higher — dated Brent reached around $122 per barrel, according to LSEG data cited by Reuters.reuters

Aramco Pivots East

To compensate for lost Red Sea capacity, Aramco began offering its flagship Arab Light grade along with Arab Medium and Arab Heavy to Asian term buyers for loading via ship-to-ship transfer off Oman's Sohar port, which lies outside the Strait of Hormuz. Saudi Arabia also doubled daily crude loadings at its Ras Tanura and Juaymah terminals inside the Gulf to about two very large crude carriers per day — equivalent to 4 million barrels — according to satellite tracking by Energy Aspects.tribune

Analysts have cautioned that a drawn-out shutdown of the pipeline puts more than 4 million barrels per day of export capacity at risk. Attention among European buyers has now shifted to October allocations from Aramco, which typically appear around the 10th of the month ahead of loading.thedeepdive