Aramco (Saudi Aramco) has informed two European refineries that it will not be able to supply their crude oil in October. This news comes after recent disruptions in the route for transporting Saudi oil to the Red Sea, which will have significant impacts on the global oil market.
Reasons for Halting Oil Deliveries
Disruptions in the transportation of oil from eastern Saudi Arabia to the port of Yanbu on the Red Sea coast, caused by recent attacks on the country's oil infrastructure, have led to this decision by Aramco. The company has notified its European customers that oil shipments will be canceled next month. Given that these refineries source part of their oil needs from Saudi Arabia, the halt in deliveries will put pressure on them to find alternatives in the global oil market.
Read more: New Sanctions on Saudi Oil Tankers and Their Impact on Global Oil Supply
Consequences of Disruption in Transportation Route
The East-West pipeline in Saudi Arabia is one of the vital routes for the country's oil exports, allowing oil to be transported from eastern fields to the Red Sea. This pipeline enables Saudi Arabia to export part of its oil without passing through the Strait of Hormuz. Disruption in this route has led Riyadh to seek alternative options for transporting its oil. According to available information, Saudi Arabia is trying to reactivate part of the damaged pipeline's capacity, but returning it to full capacity may take several weeks.
Meanwhile, Aramco has increased oil transfers from terminals located in the Persian Gulf to compensate for part of the reduction in exports from the Red Sea route. This action may help balance the oil market, but given the high demands of European refineries, it seems that these efforts alone will not be sufficient.
Read more: Increase in LNG Shipments from Qatar Passing Through the Strait of Hormuz · Discovery of 74,000 Liters of Smuggled Fuel in Zahedan, Kerman
