East-West pipeline shutdown hits home as Saudi Aramco halts supplies to Indian refiners: Report
Saudi Arabia's East-West pipeline shutdown has halted crude deliveries to Indian refineries, which heavily rely on Aramco. While spot cargoes may provide alternatives, prices are expected to rise.
The closure of the East-West pipeline in Saudi Arabia has significantly impacted Indian refineries, as state-owned oil company Aramco has halted crude supplies to the country. According to The Economic Times, Aramco, which has been supplying about 9% of India's crude imports since the beginning of the war, has ceased all shipments through both the Red Sea and the Strait of Hormuz.
While Indian refiners can seek alternative sources, the supplies are expected to be pricier. The East-West Pipeline, stretching over 1,200 kilometers, typically carries 4 million to 5 million barrels of crude daily, constituting 4% to 5% of global supply. The pipeline was recently damaged by Houthi drones, forcing temporary shutdowns.
Indian state-owned refiners are grappling with supply uncertainty, particularly for November and beyond. India has relied on discounted Russian oil and secure Middle Eastern supplies to keep import costs down, but this twin squeeze could force processors to compete for barrels from other regions, putting pressure on margins for state fuel retailers selling fuel below cost.
The shutdown has also impacted European customers, with Aramco suspending oil loadings at the Red Sea port of Yanbu.
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