Saudi Arabia cuts crude oil shipments to Europe after pipeline att∆ck
Saudi Arabia cuts crude oil shipments to Europe after pipeline attack
Saudi Arabia has cut oil shipments to Europe after drone attacks damaged its key export pipeline to the Red Sea, prompting major customers such as Poland to seek alternative supplies as crude cargo prices rose above $120 a barrel.
In a report on Tuesday, Reuters said the attacks, which Saudi Arabia blamed on Iraqi militia, forced the kingdom to shut its east-west desert oil pipeline on September 11.
According to the report, the pipeline had shielded Saudi Arabia from the worst impact of the closure of the Strait of Hormuz over the last six months.
Oil trading and shipping sources told Reuters that Saudi Arabia had informed European customers that some September-loading crude cargoes would be cancelled, while oil loadings at the Red Sea port of Yanbu had been suspended.
Saudi Aramco, state oil company, declined to comment.
Trading sources told the publication that the cut in Saudi oil flows through the Red Sea would prompt the kingdom to export more crude through the Strait of Hormuz using so-called “dark shipments,” similar to those already used by the United Arab Emirates and Iraq.
The report added that such shipments have enabled Gulf oil producers to export between 7 million and 9 million barrels per days, equivalent to 30 percent to 40 percent of pre-war volumes.
According to the report, the supply disruption supported oil prices, with Brent futures trading near $108 a barrel, while cargo prices in Europe’s physical market were even higher.
LSEG data showed key benchmark dated Brent was around $122 a barrel.
A Vortexa data cited in the report said Saudi Arabia loaded 22 million barrels of oil across 12 vessels at Ras Tanura/Juaymah between September 7 and 13, compared with six to seven vessels per week in the preceding three weeks.
Reuters said it could not immediately determine how many cargoes to Europe would be cancelled or how long Yanbu loadings would remain suspended.
