Saudi Aramco has suspended or delayed crude oil shipments to European refiners due to the shutdown of the East-West pipeline. This pipeline, which has a transfer capacity of 7 million barrels per day, has been one of the main routes for transporting Saudi oil to global markets. The shutdown of this pipeline followed an attack on September 10 and is currently impacting oil deliveries to at least three European refiners.
Impact of Pipeline Shutdown on Oil Market
According to market sources, several European refiners have either canceled or postponed oil shipments scheduled for the end of September, and these shipments have now been delayed until November. Additionally, two other refiners are expecting to receive notices for their September oil supply, indicating the widespread impact of the pipeline shutdown on oil supply.
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Current Oil Inventory Situation in Yanbu
A market source has stated that by the end of September, every Saudi oil shipment planned for the last 10 days of the month is at risk. It is estimated that oil inventory at the Yanbu port, which is connected to the East-West pipeline, is down to about five days. Meanwhile, Aramco has not responded to requests for comment on this matter.
In August, a Bloomberg report indicated that Aramco would deliver full quantities of crude oil to at least three European refiners for September according to their contracts. However, according to Vortexa data, no oil shipments have left Yanbu since September 11. Saudi oil exports from the Sidra terminal in Egypt averaged about 1.95 million barrels per day in the first two weeks of September, while oil arrivals at Ain Sukhna averaged 1.40 million barrels per day.
Crude oil exported from Yanbu can be transferred to the Ain Sukhna terminal in Egypt and from there transported via the SUMED pipeline with a capacity of 2.5 million barrels per day to Sidra in the Mediterranean. Refiners like Orlen in Poland are purchasing alternative oil. Orlen has been buying crude oil from the North Sea including Grane, Johan Sverdrup, and Johan Castberg through spot tenders and has also requested offers for WTI Midland crude from the United States and CPC Blend from Kazakhstan.
At least four September tanker contracts from Sidra to Gdansk have been canceled. Aramco supplies nearly 40% of the crude processed by Orlen, which has refineries in Poland, Lithuania, and the Czech Republic. Orlen has stated that its refineries continue to receive feedstock. The East-West pipeline had become one of Saudi Arabia's most important options for limited oil exports from the Gulf, and its shutdown is now reaching European customers as lost shipments.
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