Saudi Aramco Notifies European Customers of Next Month's Oil Supply Cut
Following a drone attack on the Red Sea pipeline route, Saudi Arabia announced that crude oil shipments to European refineries cannot be made next month.
Following a drone attack targeting the critical pipeline extending to the Red Sea, Saudi Aramco informed at least two oil refinery customers in Europe that crude oil shipments next month will not be carried out.
Pipeline Attack and Shutdown Decision
Following the drone attacks last week, Saudi Arabia was forced to shut down the East-West oil pipeline. A source close to the matter stated that the pipeline is expected to operate partially within a few days and at full capacity within six weeks.
European Customers' Supply Process
European customers generally procure Saudi Arabian crude oil through term contracts. It was stated that these deliveries will not take place next month and that the decision covers all European buyers.
Sidi Kerir Port and Shipment Route
European refineries mostly receive Saudi crude oil from Egypt's Sidi Kerir port on the Mediterranean coast, which is connected to the Red Sea via a pipeline. The interruption in the pipeline directly affected this shipment route.
Market Impacts and Search for Alternatives
The interruption in the pipeline triggered panic buying among some of Aramco's customers. Poland's Orlen SA has opened more than ten tenders since Friday to secure alternative supply sources.
Import Data
According to data from the International Energy Agency's monthly Oil Market Report, OECD European countries imported 577,000 barrels of crude oil per day from Saudi Arabia in June.