Saudi Arabia Cuts Europe Off From October Crude as Gulf Exports Surge
At least two European refiners were told their October allocations are zero, Bloomberg reported Friday. People familiar with the decision said it applies to all European term buyers.
While Saudi Aramco seems to have found a way to move some of the crude that was stranded by the East-West pipeline, Europe is on the wrong side of the workaround.
The East-West pipeline had been moving 4 million to 5 million barrels per day across Saudi Arabia to Yanbu, bypassing the Strait of Hormuz. Crude from Yanbu could move through Egypt’s SUMED system to Sidi Kerir on the Mediterranean, giving European refiners access to Saudi barrels without entering the Gulf.
The pipeline attack stopped that flow, and Europe was left scrambling.
Aramco has since sold about 60 million barrels from its Persian Gulf export terminal at Ras Tanura for September and October loading. Those barrels will move through Hormuz and undergo ship-to-ship transfers near Sohar, Oman. The program puts roughly 1 million to 1.5 million bpd of Saudi Gulf exports back into the market—with buyers in China, South Korea, India and Japan, and decidedly not Europe.
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