Cargoes due to load in the final 10 days of September are being scrapped or pushed back as Saudi Aramco reins in term crude supplies to European refiners, with a key export pipeline still sitting offline.
Notices to that effect have already reached at least three European refiners, whose cargoes have either been cancelled or delayed to as late as November, according to market sources cited by Argus. A further two refiners are bracing for comparable news on their September volumes over the coming days.
Roughly five days of Saudi crude inventories are all that remain at the Red Sea port of Yanbu, one source estimated, warning that no Saudi cargo booked to load in the last 10 days of the month is safe. Argus could not directly confirm the figure, and Aramco declined to comment.
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At the root of the disruption is Saudi Arabia’s 7 million barrel per day East-West pipeline, which has sat idle since an attack on September 10. The line carries crude from fields near the Mideast Gulf to Yanbu for export, offering a route that sidesteps the Strait of Hormuz.
Under normal operations, the oil then moves from Yanbu to Egypt’s Ain Sukhna terminal and onward through the 2.5 million barrel per day Sumed pipeline to Sidi Kerir on the Mediterranean coast. Vortexa data cited by Argus shows that no Saudi crude has left Yanbu since September 11. Over the first two weeks of the month, Saudi exports from Sidi Kerir averaged around 1.95 million barrels per day, while arrivals at Ain Sukhna ran near 1.40 million barrels per day.
Strain was visible even before the pipeline was hit. Some European customers had already been told by Aramco that early September exports from Sidi Kerir were running about two weeks behind, delays that sources tied to Houthi attacks on Saudi shipping in the Red Sea.
Among the buyers moving fastest to cover the shortfall is Poland’s state-controlled Orlen, which leans on Aramco for roughly 40% of the crude processed at its refineries in Poland, Lithuania and the Czech Republic. Since September 11 the company has floated at least eight tenders for grades from the Mediterranean, the North Sea and west Africa, picking up North Sea barrels including Grane, Johan Sverdrup and Johan Castberg while seeking offers for US WTI Midland and Kazakhstan’s CPC Blend. At least four chartered tankers running from Sidi Kerir to Gdansk fell through. Orlen said its plants continue to receive crude.
Attention among European term buyers has now shifted to October allocations from Aramco, which typically appear around the 10th of the month ahead of loading.
Repairs to the line could take weeks, and analysts caution that a drawn-out shutdown puts more than 4 million barrels per day of export capacity at risk, keeping upward pressure on prices that have surged over the past month.
