Saudi Aramco Cancels European Crude Cargoes as Key Pipeline Stays Shut
Saudi Aramco has canceled or delayed crude deliveries to European refiners after the shutdown of the kingdom’s East-West pipeline cut into one of its remaining routes around the Strait of Hormuz. 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…
Saudi Aramco has halted or delayed crude shipments to European refiners following the closure of the East-West pipeline, which bypasses the Strait of Hormuz. At least three European refineries have canceled or postponed September deliveries, with two more anticipating notices for the same month, according to Argus market sources.
The 7-million-barrel-per-day (bpd) East-West pipeline has been inactive since a September 10 attack, carrying crude from eastern Saudi fields to the Red Sea port of Yanbu. One market insider told Argus that every Saudi cargo slated for the final ten days of September could be in jeopardy. Yanbu reportedly has only around five days of crude reserves left.
Argus could not independently verify this estimate, and Aramco did not respond to inquiries. In August, Bloomberg had reported that Aramco would fulfill full contractual crude volumes for three European refiners in September, but no Saudi crude has left Yanbu since September 11, as per Vortexa data cited by Argus. Saudi exports from Egypt's Sidi Kerir terminal averaged 1.95 million bpd in the first two weeks of September, while Ain Sukhna averaged 1.40 million bpd.
Crude transported through Yanbu can be delivered to Egypt's Ain Sukhna terminal and transported to the Mediterranean via the 2.5-million-bpd SUMED pipeline. Polish oil firm Orlen has already acquired replacements, purchasing North Sea crude grades such as Grane, Johan Sverdrup, and Johan Castberg through spot bids and seeking offers for U.S. WTI Midland and Kazakhstan's CPC Blend.
At least four September tanker slots from Sidi Kerir to Gdansk have failed. Aramco supplies about 40% of the crude processed by Orlen, which operates refineries across Poland, Lithuania, and the Czech Republic. Orlen stated that its refineries are still receiving feedstock. The shutdown of the East-West pipeline, a significant alternative to constrained Persian Gulf exports, is now impacting European term customers with missing barrels.
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