Saudi Arabia cuts oil deliveries to Europe after pipeline damage

Saudi Arabia has reduced some of its crude oil deliveries to European buyers after drone attacks damaged a major export pipeline that runs toward the Red Sea, industry traders said, forcing top purchasers—most notably Poland—to scramble for alternative supplies as spot prices in Europe surged above $120 per barrel.

Riyadh has blamed Iraqi paramilitary groups for the strikes. The damage forced the kingdom on Friday to shut the desert East–West pipeline, which during the past six months had served as the main workaround for disruptions caused by the blockade of the Strait of Hormuz.

Shipments cancelled, loading at Yanbu halted

Traders said Saudi officials informed European buyers of the cancellation of part of September crude shipments and that loading at the Red Sea port of Yanbu has been temporarily stopped. Saudi Aramco declined to comment on the situation.

Satellite imagery shows extensive damage to the East–West crude pipeline after strikes attributed to Yemen-based forces; repairs are expected to take anywhere from several months to a full year.

The supply disruption pushed oil prices higher: Brent futures traded near $108 per barrel while physical cargo prices in Europe were even higher, with the Brent benchmark reaching about $122 per barrel, according to LSEG data.

Analyst house Vortex said Saudi Arabia loaded 22 million barrels onto 12 tankers at the Ras Tanura and Juaymah terminals in the week of September 7–13, roughly double the six to seven tankers per week recorded in the prior three weeks. It remains unclear how many deliveries to Europe will be cancelled in total or how long loading at Yanbu will remain suspended.

Poland's oil company Orlen has been urgently seeking replacement crude to cover the sudden shortfall of Saudi shipments, according to industry sources. Saudi Aramco became Orlen's main supplier in 2022 and now covers about 40 percent of the company's needs, a shift that helped Poland reduce dependence on Russian oil but also increased its exposure to Saudi supply disruptions.

Orlen said it was actively managing inventories to avoid raw-material shortages at its refineries and was buying cargoes on spot tenders. "Adjustment and optimization of procurement are a regular part of Orlen Group's operations, depending on current production needs and market conditions," a company spokesperson said. Sources added Orlen purchased North Sea grades including Grane, Johan Sverdrup and Johan Castberg and made offers for more distant crudes such as U.S. WTI Midland and Kazakhstan's CPC Blend. One trader said Orlen issued a tender on Tuesday for North Sea or Algerian crude for October and Guyana crude for November, with results not yet known.

Orlen and its units operate refineries in Poland, Lithuania and the Czech Republic. Kpler data show that since the start of this year Poland's port of Gdansk has received about 160,000 barrels per day of Saudi oil, while Lithuania's port of Butinge received about 63,000 barrels per day.

Photo: press material from the event