Saudi Aramco has informed at least two oil refining customers in Europe that they will receive no crude oil next month following an attack on the kingdom’s main pipeline to the Red Sea, according to a report from Bloomberg News, citing people familiar with the matter. European customers typically receive Saudi Arabian crude through term contracts that provide steady monthly supply. These deliveries will not occur next month, the people said. The decision affects all European buyers, they added.
Saudi Aramco did not immediately respond to a request for comment made outside normal working hours.
Saudi Arabia shut its East-West pipeline last week after a drone attack. The line is expected to partially restart within days and return to full operation within six weeks, a person familiar with the matter said on Wednesday.
The scale of the disruption is staggering. The 1,200-km East-West Pipeline had been carrying 4 million to 5 million barrels per day to the Red Sea port of Yanbu — equivalent to 4%–5% of global oil supply, having become the kingdom’s critical export lifeline after war in the Gulf effectively closed the Strait of Hormuz. Reuters reported on September 17, citing satellite imagery and industry sources, that three pumping stations were damaged in the September 11 drone attack, one more than initially assessed, with repair estimates ranging from a partial resumption within days to a full recovery in five to six weeks.
European OECD countries had been importing 577,000 barrels per day from Saudi Arabia as of June, according to the International Energy Agency. Those volumes, delivered via Egypt’s Mediterranean port of Sidi Kerir through a Red Sea pipeline link, now face a complete halt for October.
Source: Investing.com
