Key facts
- Saudi Arabia has cut oil shipments to Europe after drone attacks damaged its key export pipeline to the Red Sea.
- Orlen is seeking alternative crude oil supplies from the North Sea and further afield to replace disrupted Saudi imports.
- The Polish firm purchased several spot crude oil cargoes, including North Sea grades, U.S. WTI Midland, and Kazakh CPC Blend.
- Cargo prices topped $120 a barrel amid the supply disruption.
Polish integrated oil firm Orlen is actively seeking alternative crude oil supplies from the North Sea and other regions to replace disrupted Saudi imports, according to five industry sources. The escalation of the Middle East conflict, including drone attacks on Saudi Arabia's key export pipeline to the Red Sea, has prompted the Polish company to seek alternative supplies.
Saudi Arabia informed European customers that some September-loading crude cargoes will be cancelled and oil loadings at the Red Sea port of Yanbu have been suspended. The attacks, which Saudi Arabia has blamed on Iraqi militia, forced the kingdom to shut its East-West desert oil pipeline. The supply disruption supported oil prices, with Brent oil futures trading near $108 a barrel and cargo prices in Europe's physical market topping $122 per barrel.
Orlen purchased several cargoes of crude oil in spot tenders on Friday and Monday. Traders indicated that the company acquired North Sea grades such as Grane, Johan Sverdrup, and Johan Castberg. Additionally, Orlen tendered for grades from further afield, including U.S. WTI Midland and Kazakh CPC Blend, according to two sources. While tender results could not be directly confirmed with counterparties, Orlen declined to comment on specific commercial transactions but stated it actively manages its supply portfolio to ensure uninterrupted operation of its refining assets. Feedstock deliveries to Orlen refineries are currently proceeding without disruption.