Key facts
- Saudi Aramco has canceled or delayed crude deliveries to European refiners due to the shutdown of the East-West pipeline.
- The 7-million-barrel-per-day East-West pipeline has been offline since a September 10 drone attack.
- The pipeline moves crude from eastern Saudi oil fields to the Red Sea port of Yanbu, bypassing the Strait of Hormuz.
- At least three European refiners have had late-September cargoes canceled or pushed as far out as November.
- Yanbu had roughly five days of crude inventories remaining, according to one market source.
- No Saudi crude has departed Yanbu since September 11.
Saudi Aramco has canceled or delayed crude deliveries to European refiners following the shutdown of the kingdom’s East-West pipeline, a critical route that bypasses the Strait of Hormuz. The 7-million-barrel-per-day pipeline has been offline since a September 10 drone attack, impacting supplies to key customers.
At least three European refiners have had late-September cargoes canceled or pushed as far out as November, according to market sources cited by Argus. Two more expect notices covering September supplies. One market source told Argus that every Saudi cargo scheduled for the final 10 days of September could be at risk. The same source estimated that Yanbu, the Red Sea port where the pipeline terminates, had roughly five days of crude inventories remaining, though Argus could not independently confirm this estimate. Aramco declined to comment.
In August, Bloomberg had reported that Aramco would supply full contractual crude volumes to at least three European refiners for September. However, no Saudi crude has departed Yanbu since September 11, according to Vortexa data cited by Argus. Saudi exports from Egypt’s Sidi Kerir terminal averaged about 1.95 million bpd during the first two weeks of September.
Poland’s Orlen is already buying replacements, having purchased North Sea grades including Grane, Johan Sverdrup and Johan Castberg through spot tenders and seeking offers for U.S. WTI Midland and Kazakhstan’s CPC Blend, traders told Reuters. At least four September tanker fixtures from Sidi Kerir to Gdansk have failed. Aramco supplies roughly 40% of the crude processed by Orlen, which operates refineries in Poland, Lithuania and the Czech Republic. Orlen stated its refineries continue receiving feedstock.
The East-West line had become one of Saudi Arabia’s most important alternatives to constrained Persian Gulf exports. Its shutdown is now reaching European term customers in the form of missing barrels.