Saudi Arabia Cancels Some Europe Oil Cargoes After Pipeline Drone Attacks
RIYADH, SAUDI ARABIA — WEB DESK: Saudi Arabia has cancelled some crude oil cargoes destined for Europe after drone attacks damaged its crucial East-West pipeline, disrupting an export route that has become increasingly important amid severe constraints on shipping through the Strait of Hormuz.
Trading and shipping sources told Reuters that Saudi Arabia informed European customers that some crude cargoes scheduled for September loading would be cancelled, while oil loading operations at the Red Sea port of Yanbu were suspended.
The disruption followed drone attacks that damaged Saudi Arabia’s East-West Pipeline, forcing the kingdom to shut the route on September 11. Saudi Arabia has blamed an Iraqi militia for the attacks.
The pipeline stretches roughly 1,200 kilometres across Saudi Arabia and has been carrying around 4 million to 5 million barrels per day, making it a critical alternative for crude exports while normal traffic through the Strait of Hormuz remains heavily disrupted.
The scale of the interruption has significant implications for global energy markets. Reuters reported that the pipeline’s capacity represents roughly 4% to 5% of global oil supply.
Importantly, Saudi Arabia has not cancelled all oil supplies to Europe. The confirmed development concerns some September-loading cargoes, and Reuters said it could not immediately establish how many European shipments would be cancelled or how long the suspension at Yanbu would last.
State-owned Saudi Aramco declined to comment on the reported cancellations.
Poland Scrambles for Alternative Oil
The disruption is having an immediate impact on European buyers, particularly Poland.
Polish energy group Orlen, one of the biggest European buyers of Saudi crude, has been seeking replacement supplies from the North Sea and other international sources, according to five industry sources cited by Reuters.
Saudi Aramco supplies approximately 40% of the crude processed by Orlen, making the Polish company particularly exposed to interruptions in Saudi shipments. Orlen operates refineries in Poland, Lithuania and the Czech Republic.
Orlen said feedstock deliveries to its refineries were continuing without disruption and stressed that diversification of supply sources is a routine part of its operations.
Industry sources said Orlen had purchased North Sea crude grades including Grane, Johan Sverdrup and Johan Castberg, while it also sought supplies including US WTI Midland and Kazakhstan’s CPC Blend.
The Polish company has additionally looked at Algerian and Guyanese crude as it seeks to secure future deliveries.
European Physical Oil Prices Hit $122
The Saudi disruption has added pressure to an already tight global crude market.
Brent futures were trading around $108 per barrel, while the physical European market was substantially tighter. Dated Brent, an important benchmark for physical crude transactions, reached approximately $122 per barrel, according to LSEG data cited by Reuters.
Oil prices eased somewhat on Wednesday, with Brent around $107.82 per barrel, after industry data showed an unexpected increase in US crude inventories. However, Saudi supply concerns continued to provide support to the market.
Saudi Arabia Looks for Alternative Export Routes
The disruption is particularly significant because the East-West Pipeline has allowed Saudi Arabia to move crude from its eastern oil-producing regions to the Red Sea, bypassing the Strait of Hormuz.
With Yanbu loadings suspended, trading sources expect Saudi Arabia to explore additional exports through Hormuz and other arrangements.
On Wednesday, Reuters reported that Saudi Arabia was offering additional crude supplies to Asian refiners through ship-to-ship transfers off Oman, highlighting efforts to maintain exports despite the pipeline disruption.
The duration of the pipeline outage remains uncertain.
US Energy Secretary Chris Wright said he expected the route to return to operation within days, but other industry estimates have ranged from several days to as long as five or six weeks for repairs.
That uncertainty means the impact on European oil supplies will depend heavily on how quickly Saudi Arabia can restore the pipeline and resume normal loadings from Yanbu.
For global markets, the disruption has added another layer of supply risk at a time when Middle Eastern energy flows are already under severe pressure.
