Saudi Arabia has cut some oil shipments to Europe after drone attacks damaged its key export pipeline to the Red Sea and forced the closure of the East-West pipeline and suspension of loadings at Yanbu. Some September crude cargoes to European customers have been cancelled, although the duration and scale of the disruption remain unclear.
The disruption has pushed European crude prices higher, with benchmark dated Brent around $122 per barrel. Saudi Arabia may seek to increase exports through the Strait of Hormuz using “dark shipments,” as Persian Gulf producers have already been using such methods to maintain exports.
Poland’s Orlen is seeking alternative supplies as Saudi Arabia accounts for about 40% of its crude imports. The company has bought North Sea grades and is also seeking U.S., Kazakh, Algerian and Guyanese crude through spot tenders. Despite the disruption, Orlen said refinery feedstock deliveries are currently continuing without interruption.