Saudi Aramco has told at least two European refining customers they will receive no crude deliveries next month following a drone attack on the kingdom’s critical East-West pipeline, Bloomberg reported on Friday. The suspension applies to all European buyers under long-term contracts, according to people familiar with the matter.
The 1,200-kilometer East-West pipeline, which can carry up to 7 million barrels per day from eastern oil fields to the Red Sea port of Yanbu, has been shut since a September 10 drone attack damaged pumping infrastructure. Reuters reported on September 17 that three pumping stations were damaged, one more than initially assessed. Repair estimates range from a partial restart within days to full recovery taking five to six weeks.
The pipeline had become Saudi Arabia’s key alternative export route after Iranian attacks sharply reduced tanker traffic through the Strait of Hormuz. With the Red Sea route now cut, European refiners are racing to secure replacement barrels from the North Sea and elsewhere. Poland’s Orlen, which relies on Saudi Arabia for roughly 40% of its crude feedstock across three refineries, has issued more than ten tenders since last Friday. At least three European refiners have had September cargoes canceled or delayed as far out as November, with two more expected to receive similar notices, according to market sources cited by Argus.
European OECD countries imported 577,000 barrels a day of crude from Saudi Arabia in June, based on International Energy Agency data. Brent crude climbed as high as $108 a barrel this week before easing to around $104.84 on Friday morning, while WTI traded near $103. Physical cargoes showed even more stress: some European crude prices were reported above $130 a barrel, with North Sea Forties reaching $136.75.
Consultancy Rapidan Energy expects Saudi crude exports to fall by 400,000 barrels a day this month because of the outage, partly offset by higher flows through Hormuz. The consultancy warned that risk remains skewed toward a larger disruption if the pipeline outage extends past September or attacks escalate. The energy shock is also feeding broader inflation concerns that helped push the Federal Reserve to raise interest rates for the first time since 2023.
