Key facts
- Saudi Arabia has informed European refineries that some September-loading cargoes will be cancelled or postponed.
- Drone attacks on September 10 struck Saudi Arabia's East-West Pipeline at multiple locations, damaging at least one pumping station.
- The 1,200-kilometer Petroline can carry around 7 million barrels per day from Saudi Arabia’s eastern producing regions to Yanbu on the Red Sea.
- Kpler estimates the pipeline had been moving roughly 4 million bpd around Hormuz before the attack.
- Houthi forces have advanced along Yemen’s Red Sea coast, capturing key islands and ports.
- The conflict is moving closer to producing assets, with pipelines, pumping stations, ports, and tankers already attacked.
Saudi Arabia has informed European customers that some September-loading oil cargoes will be cancelled or postponed, and loadings from Yanbu have been suspended, following drone attacks on its critical East-West Pipeline. The attacks, which struck the 1,200-kilometer Petroline at multiple locations and damaged at least one pumping station, have forced the shutdown of the pipeline that can carry up to 7 million barrels per day from the Kingdom's eastern producing regions to Yanbu on the Red Sea.
Before the September 10 attacks, the pipeline was moving approximately 4 million barrels per day, according to Kpler estimates. A prolonged outage could threaten 3.5–4 million bpd of Saudi crude exports. Crude inventories at Yanbu have fallen below 15 million barrels, down from almost 21 million barrels in July, representing little more than four days of supply at an export rate of 3.5 million bpd.
The conflict is escalating in Yemen, with Houthi forces reportedly making gains along the Red Sea coast and capturing key ports. Fears are rising of another major offensive around Marib, which contains major oil and gas fields. The conflict's proximity to energy assets is a growing concern, with pipelines, pumping stations, ports, and tankers already targeted. Any escalation toward Saudi processing facilities or producing fields would represent a significant global supply shock.
U.S. officials reportedly met with Houthi leaders in Oman, receiving assurances that the group would not target U.S. shipping. However, Saudi-linked vessels remain considered targets. The Trump administration has not intervened militarily, increasing pressure on Riyadh to negotiate or seek broader regional support.
For Europe, the consequences are already tangible, with at least three European refiners experiencing cancellations or delays of late-September cargoes, some until November. While Europe can seek alternative supplies from regions like the North Sea, U.S. Gulf Coast, Kazakhstan, Algeria, Guyana, Brazil, and West Africa, Asian refiners are also competing for these barrels. This competition will likely lead to higher crude differentials and increased freight costs, as Saudi barrels from Yanbu were conveniently positioned for European and Mediterranean refiners.
Libya's energy sector also presents a risk, with temporary halts in production highlighting another vulnerability for Europe as it searches for replacements for disrupted Saudi barrels.