Saudi Aramco Cancels October Crude Deliveries to European Refiners After Pipeline Attack

State-owned oil producer Saudi Aramco has informed at least two European refining customers that they will receive zero crude oil allocations under long-term agreements next month. The disruption follows a drone strike that damaged Saudi Arabia's critical East-West pipeline, cutting off a vital artery carrying crude to the Red Sea port of Yanbu and forcing international buyers to scramble for alternative supplies.

European refiners normally acquire Saudi crude through term contracts guaranteeing steady monthly volumes. However, Aramco's decision to cancel October deliveries applies across the board to European buyers, according to industry sources. Poland's Orlen SA has already initiated searches for alternative shipments, helping drive dated Brent prices above US$130 per barrel earlier in the week, as reported by Reuters.

The supply halt stems from an attack last week that forced the emergency shutdown of the 1,200-kilometre East-West pipeline, which transports oil across the kingdom to Yanbu on the Red Sea. The pipeline serves as an essential bypass for the Strait of Hormuz, a key maritime chokepoint that has faced severe shipping disruptions amid ongoing conflicts in the Middle East. While Aramco engineers have been working to execute a partial restart within days and restore full capacity within six weeks, the immediate loss of Red Sea flows has severely restricted export options for Western markets.

To manage ongoing commitments, Aramco has made the rare move of offering spot cargoes to Asian customers for collection just outside the Persian Gulf. This shift marks a return to utilizing routes near the embattled Strait of Hormuz, an area the company largely avoided during heightened regional hostilities due to maritime security risks. Sales of tens of millions of barrels for collection outside the waterway highlight a strategic reallocation of available output toward Asian buyers.

While Asian refiners gain access through Persian Gulf terminals, European customers face severe logistical barriers. Shipments originating from the Gulf must either navigate the Red Sea, where regional militants have targeted shipping infrastructure, or undertake a lengthy five-week voyage around the African continent. European refineries typically lift Saudi crude from Egypt's Mediterranean port of Sidi Kerir, which links to the Red Sea via pipeline. Organization for Economic Co-operation and Development European nations imported 577,000 barrels a day of crude from Saudi Arabia in June, according to International Energy Agency data. Saudi Aramco did not immediately respond to requests for comment regarding the October delivery cancellations.