Saudi Aramco has told at least two oil refining customers in Europe that they will receive no crude oil next month, after the kingdom’s key pipeline to the Red Sea was attacked, according to people informed of the decision.
European customers normally receive Saudi Arabian crude under so-called term contracts, which ensure a steady flow of supply every month. Those deliveries will not take place next month, the people said. They asked not to be identified because the information isn’t public. They also said the decision applies to all European buyers. Saudi Aramco didn’t immediately respond to a request for comment made outside normal working hours.
Saudi Arabia was forced to shut its East-West pipeline last week after it was attacked by drones. A person familiar with the matter said Wednesday that the line is due to partially restart within days and be fully back up and running within six weeks.
European refineries typically lift Saudi crude from Sidi Kerir, Egypt’s Mediterranean port, which is connected to the Red Sea via a pipeline.
The pipeline shutdown caused panic buying among some of Aramco’s customers. Poland’s Orlen SA issued more than ten tenders since Friday in a race to secure alternative supplies.
The stakes for Europe are significant. European countries in the OECD imported 577,000 barrels a day of crude from Saudi Arabia in June, the International Energy Agency said in its monthly Oil Market Report.
