Saudi Aramco suspends European crude deliveries after East-West pipeline attack - report

The customers typically receive Saudi crude through long-term supply agreements, which provide regular monthly deliveries.

Saudi Aramco has told at least two European oil refining customers they will receive no Saudi crude shipments next month after an attack on the kingdom’s key East-West pipeline, Bloomberg reported Friday. 

The customers typically receive Saudi crude through long-term supply agreements, which provide regular monthly deliveries. People familiar with the matter told Bloomberg that those allocations will not be provided next month.

Saudi Aramco did not immediately respond to a request for comment.

Saudi Arabia shut down its East-West pipeline last week after drones targeted the facility. The pipeline is expected to resume partial operations within days and return to full capacity within six weeks, according to a person familiar with the situation who spoke on Wednesday. 

While oil and security sources previously said two pumping stations were damaged in the attack, a Reuters analysis of satellite imagery identified damage at three stations, sources confirmed in a Reuters report on Thursday. 

European refineries that purchase Saudi crude typically receive shipments through Egypt’s Mediterranean port of Sidi Kerir, which is linked to the Red Sea by pipeline infrastructure.

Aramco customers seek alternative oil sources

The disruption has prompted some Aramco customers to seek alternative sources of supply. Poland’s Orlen SA has issued more than 10 tenders since Friday as it looks to secure replacement crude shipments.

European countries belonging to the OECD imported 577,000 barrels per day of Saudi crude in June, according to the International Energy Agency’s monthly Oil Market Report.

The pipeline has provided Saudi Arabia with a vital alternative to the Strait of Hormuz, reducing reliance on a narrow maritime chokepoint through which a significant share of global energy supplies passes.

Any further decline in Saudi crude exports could add pressure to an already strained global energy market, potentially driving higher fuel prices, increasing inflation concerns, and contributing to greater volatility in financial markets.