Saudi Aramco ramps up Gulf shipments as pipeline disruption reshapes oil flows

Saudi Aramco has halted crude oil deliveries to European and Indian refineries for October after drone strikes forced the shutdown of Saudi Arabia's East-West pipeline, disrupting a critical export route and reshaping global oil flows.

The state oil giant loaded approximately 14 million barrels of crude onto seven very large crude carriers at its Ras Tanura port on Sunday as it scrambled to reroute exports through the Persian Gulf, according to data from TankerTrackers.com cited by Reuters. Satellite images reviewed by Reuters confirmed seven tankers positioned near the port. Brent crude fell on Monday, with oil prices declining amid expectations that Saudi shipments through alternative routes would partially offset the pipeline disruption.investing+1

Pipeline Shutdown Forces Export Rerouting

The East-West pipeline, a 1,200-kilometer conduit linking Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu, was shut down after drone attacks launched from Iraqi territory struck multiple pumping stations on September 10-11. The Saudi Foreign Ministry condemned the attack, saying it resulted in "injuries and some damage".nytimes+2

With the Red Sea route severed, Aramco cancelled crude cargoes for European customers and suspended supplies to Indian refiners until further notice, according to Bloomberg and The Economic Times. The halt applies to all European buyers under long-term contracts. OECD European countries had been importing about 577,000 barrels per day from Saudi Arabia, while Indian refiners source roughly 9% of their crude from the kingdom.akm+5

Gulf Workaround Takes Shape

Aramco has pivoted to its eastern Gulf terminals, selling about 60 million barrels from Ras Tanura for September and October loading, with crude transferred ship-to-ship at Oman's Sohar port before continuing to buyers in Asia. JPMorgan analysts found Saudi oil flows through the Strait of Hormuz averaged about 2.9 million barrels per day over six days before September 18, up from roughly 700,000 barrels per day in August.businessupturn

China, South Korea, India, and Japan are among the major buyers of these spot supplies. Aramco is also seeking diesel and gasoline cargoes in the Mediterranean to offset domestic refining shortfalls caused by separate Houthi attacks on facilities at Yanbu and Jazan.inspenet+1

Outlook Remains Uncertain

A partial restart of the pipeline is expected within days, but full capacity recovery could take about six weeks. Poland's state-owned refiner Orlen has issued more than 10 tenders seeking alternative crude since mid-September. The disruption compounds an already strained global oil market; Aramco CEO Amin Nasser warned in May that continued Strait of Hormuz disruptions could delay the oil market's return to balance until 2027.ababnews+3