Asian Refiners Seek Answers After Saudi Pipeline Shutdown

Asian refiners are uncertain about the impact of the Saudi East-West oil pipeline shutdown on oil loading at the Yanbu port. The pipeline was temporarily halted following drone attacks from Iraq near the Iranian border, causing injuries and prompting Saudi Arabia to take precautions. As the world's top crude oil exporter, the pipeline serves as a crucial route to circumvent the Strait of Hormuz when it's closed.

The shutdown has introduced significant risks to about 4 million barrels per day of Saudi crude oil shipments from Yanbu. Asian refiners had previously adapted to longer routes and timelines for receiving Saudi crude due to threats from Houthi rebels in the south and the Bab el-Mandeb Strait. Now, their supply from Yanbu may be jeopardized, prompting them to request updates from Saudi Arabia on oil loading schedules.

However, at least four Asian refiners have yet to receive any clarification from Saudi Arabia. Two of these refiners anticipate receiving their cargoes at Yanbu as planned, provided no delays are communicated in the coming hours and days, according to Bloomberg's trade sources. As the situation remains unclear, market participants began pricing in a higher risk of disruption to Middle East oil supply, with Brent prices reaching $108 per barrel in Asian trade.