Saudi Arabia's escalating pipeline damage has escalated from mere shipment delays to a complete halt for European buyers in October, as the restoration of the 1,200-kilometer East-West pipeline stretches on.
Saudi Aramco has notified at least two European refining clients that they will not receive crude supplies in October. According to Bloomberg, this adjustment extends beyond individual refineries and applies to the entire European buyer base. European refiners typically receive monthly crude shipments under long-term contracts, meaning the September cancellations and delays are now extending into the next supply cycle.
The disruption stems from a drone attack that knocked out Saudi Arabia's East-West pipeline, which traverses the Arabian Peninsula and connects eastern oil fields to the Red Sea port of Yanbu. This conduit has become the kingdom's critical alternative export route to bypass the Strait of Hormuz. Saudi Aramco is attempting to restore roughly half of the pipeline's capacity within days, though complete restoration could take another six weeks. The company has not publicly commented on the zero-allocation news for European customers in October.
European supply chain relies heavily on this vital link. The pipeline runs approximately 1,200 kilometers from the eastern Abqaiq area to Yanbu on the Red Sea. Before the Iran war, the pipeline transported about 2.8 million barrels daily, but as Hormuz tanker traffic declined sharply, Saudi Arabia rapidly boosted throughput to compensate for reduced exports from the Persian Gulf. Bloomberg data shows Yanbu's crude exports reached 4.7 million barrels per day in June, roughly 5% of global oil supply. About 2 million barrels per day of pipeline crude goes to domestic consumption, with the remainder available for Red Sea loading and export.
European buyers depend particularly on this logistics chain. Saudi crude typically loads at Yanbu, traverses the Red Sea and Suez Canal to Egypt, then moves via pipeline to the Mediterranean port of Sidi Kerir where European customers collect it. With the East-West pipeline halted, Yanbu inventories have become the buffer keeping this system running, but local stockpiles are now near historical lows. Energy Aspects analyst Nicholas Dyer notes Saudi Arabia is unlikely to fully deplete Yanbu's inventories, meaning export volumes may face further compression, triggering additional delays and cancellations downstream at Sidi Kerir.
IEA data shows OECD European members imported an average of 577,000 barrels per day from Saudi Arabia in June. While Saudi Arabia is not Europe's sole supplier, the sudden loss of monthly contractual volumes forces some refiners to seek alternatives in the spot market.
The supply squeeze is already showing up in European refiners' purchasing activity. Polish energy group Orlen announced this week that it has purchased an additional 16 million barrels of crude to compensate for Saudi supply disruptions, serving its refineries in Poland, Lithuania, and the Czech Republic. Reuters reports traders indicate Orlen is scouting replacement cargoes for September and October demand, with new purchases coming from Norway, the UK, Algeria, Kazakhstan, Azerbaijan, and the Americas. The company has also issued tenders for North Sea crude and barrels from Brazil or Guyana.
Saudi Aramco has been Orlen's largest crude supplier since 2022, accounting for about 40% of its purchases. That concentration makes Orlen one of the European refiners most directly exposed to this disruption. The scramble for alternative supplies has also strengthened regional crude prices, with several European grades already trading higher following Saudi delivery delays.
While European supplies are being cut, Saudi Arabia is reshuffling logistics for other destinations. Reuters reports Aramco has boosted ship-to-ship transfer supplies to Asian long-term customers near Oman's Sohar port, covering Arab Light, Arab Medium, and Arab Heavy grades. The operation loads crude from the Persian Gulf, then transfers cargoes outside the Strait of Hormuz, reducing dependence on the strait for onward transit. Over the past week, Saudi Arabia has also significantly increased loading volumes at the Persian Gulf ports of Ras Tanura and Juaymah. Energy Aspects satellite data estimates combined daily loadings at these two ports reached around 4 million barrels. Kpler data shows four very large crude carriers loaded at Ras Tanura on Wednesday with combined capacity of about 8 million barrels. Bloomberg reports Aramco also sold roughly 20 million barrels of crude to Asian refiners this week for September and October lifting. Some Asian customers are experiencing delays, but Saudi Arabia is maintaining supply through alternative loading points and transfer arrangements such as Sohar.
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