Saudi Aramco cancels or postpones oil deliveries to European refineries
Saudi company Saudi Aramco has cancelled or postponed crude oil deliveries to European refineries following the shutdown of the East–West pipeline in Saudi Arabia. According to OilPrice, citing market sources quoted by Argus, at least three European refineries received notices that cargoes scheduled for late September had been cancelled or that deliveries had been postponed until November. Another two refiners are awaiting notices regarding September volumes.
Pipeline shutdown
The East–West pipeline, with a capacity of 7 million barrels per day, has been out of operation since an attack on September 10. It transports oil from Saudi Arabia's eastern fields to the Red Sea port of Yanbu, providing a route bypassing the Strait of Hormuz.
One market source told Argus that the risk could affect all Saudi cargoes scheduled for the final ten days of September. It also estimated oil inventories in Yanbu at approximately five days, although Argus was unable to independently confirm this estimate and Saudi Aramco declined to comment. In August, Bloomberg reported that Aramco planned to supply full contractual volumes to at least three European refineries in September.
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Alternative supplies for Orlen
According to Vortexa data cited by Argus, no Saudi oil has been shipped from Yanbu since September 11. Oil from this port can be delivered to Egypt's Ain Sokhna terminal and then transported via the SUMED pipeline, with a capacity of 2.5 million barrels per day, to the Mediterranean terminal of Sidi Kerir. During the first two weeks of September, Saudi exports from Sidi Kerir averaged about 1.95 million barrels per day, while inflows to Ain Sokhna amounted to 1.40 million barrels per day.
Poland's Orlen is already purchasing alternative volumes. According to Reuters, the company bought North Sea grades Grane, Johan Sverdrup and Johan Castberg through spot tenders and requested offers for US WTI Midland and Kazakhstan's CPC Blend. At least four September agreements to charter tankers from Sidi Kerir to Gdansk fell through. Saudi Aramco supplies about 40% of the oil that Orlen processes at refineries in Poland, Lithuania and the Czech Republic; the company said its plants continue to receive crude.
