Saudi Arabia to halt crude oil supplies to European customers from October

The Kingdom of Saudi Arabia (KSA) is set to suspend crude oil allocations to at least two European refiners next month after an attack disrupted a key pipeline supplying the Red Sea region, according to people familiar with the matter.

European customers typically receive Saudi crude under term contracts that guarantee regular monthly supplies. However, those shipments will not be delivered next month, the sources said, requesting anonymity because the information has not been made public.

The suspension will apply to all European buyers, they added. Saudi Aramco did not immediately respond to a request for comment outside normal business hours.

Saudi Arabia was forced to shut its East-West pipeline last week after it came under attack by Houthi drones. A person familiar with the situation said on Wednesday that the pipeline is expected to partially resume operations within days and return to full capacity within six weeks.

European refineries generally receive Saudi crude through Egypt’s Mediterranean port of Sidi Kerir, which is linked to the Red Sea by pipeline. The disruption triggered panic buying among some Aramco customers, with Poland’s Orlen SA issuing more than 10 tenders since Friday to secure alternative supplies.

According to the International Energy Agency’s monthly Oil Market Report, OECD countries in Europe imported around 577,000 barrels per day of crude oil from Saudi Arabia in June.