Saudi Arabia cuts off October oil supplies to Europe – Bloomberg

The reported extension of supply disruptions follows a Houthi attack that knocked out a key export pipeline

Saudi Arabia’s state-owned energy giant, Saudi Aramco, has told European refiners that they will not receive any crude oil in October, Bloomberg reported on Friday, extending supply disruptions triggered by a Houthi attack on a key export pipeline.

Aramco had already canceled some European cargoes scheduled for September after drone strikes damaged the East-West Pipeline and halted loadings at the Red Sea port of Yanbu, Reuters reported on Tuesday. The latest notices reportedly extend the disruption into next month. Bloomberg said the decision applies to all European customers.

Fighting between a Saudi-led coalition and Houthi militants reignited in mid-July after Saudi Arabia struck Sanaa Airport to prevent an Iranian passenger plane from landing. In recent weeks, the Houthis have made territorial gains against Saudi-backed forces and stepped up attacks on strategic targets inside the kingdom.

The 1,200 km (746-mile) East-West Pipeline connects Saudi Arabia’s main eastern oil fields with Yanbu, allowing crude oil exports to bypass the Strait of Hormuz, where flows remain severely disrupted by the US war against Iran.

The pipeline was closed after drone strikes damaged three pumping stations. Saudi Arabia is reportedly seeking to restore part of its capacity within days, though a full restart could take up to six weeks.

Saudi Aramco has not commented on the reported October cancelations.

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Europe has become increasingly dependent on alternative suppliers after sharply reducing Russian oil purchases over the Ukraine conflict. The EU imposed an embargo on most Russian oil imports in 2022, forcing refiners find other suppliers.

Saudi oil flows have fallen sharply amid the Middle East conflict. The kingdom’s production dropped to 6.2 million barrels per day (bpd) in August from 10.9 million bpd in February, before the war began. The East-West Pipeline had been rerouting around 4 million bpd (4% of global supply) around the disrupted Strait of Hormuz.

The supply squeeze has forced European refiners to seek alternatives. Poland’s state-controlled energy giant, Orlen, said on Wednesday that it secured 16 additional cargoes from Norway, Britain, Algeria, Kazakhstan, Azerbaijan, and the Americas to cover Saudi disruptions through November.

READ MORE: Saudi Arabia seeking support after US declines to strike Houthis – AP

Aramco has also sought alternative export routes, offering additional oil to Asian refiners through ship-to-ship transfers off Oman’s Sohar Port.

The Houthis have meanwhile expanded their position along Yemen’s western coast and seized strategic territory near the Bab al-Mandab Strait, another major shipping passage linking the Red Sea and Gulf of Aden.

The mounting pressure on Middle Eastern supplies has kept oil above $100 a barrel. Brent futures traded around $104 on Friday, with markets weighing the Saudi disruptions and continued instability around the Strait of Hormuz.