International
oi-Prakash KL
Saudi Aramco has stopped crude oil supplies to Indian refiners following an attack on Saudi Arabia’s East-West pipeline, with deliveries suspended until further notice, The Economic Times reported on Friday.
The development could put additional pressure on Indian refiners as they look for alternative sources of crude amid continuing disruption to oil flows in the region.
Saudi Aramco suspended crude oil deliveries to Indian refiners following a drone attack on the East-West pipeline, also impacting European customers and prompting searches for alternative supplies.
The 1,200-km pipeline, which provides Saudi Arabia with a route to move crude to its Red Sea coast without relying on the Strait of Hormuz, was shut after a drone attack. The pipeline has the capacity to carry around 7 million barrels of oil a day.
Saudi Arabia had been making greater use of the route after the Strait of Hormuz came under severe disruption following attacks on ships by Iran. The East-West pipeline therefore became an important alternative for moving Saudi crude towards export terminals on the Red Sea.
The supply squeeze is not limited to Indian buyers. Saudi Aramco has informed at least two European refiners that they will not receive their contracted Saudi crude next month, Bloomberg reported, citing people familiar with the matter. The report said the decision applies to European customers receiving crude under term contracts.
Aramco has not publicly commented on the reported supply cuts.
The pipeline is expected to restart partially within days, while a full return to operations could take around six weeks, Bloomberg reported, citing a person familiar with the situation.
The disruption has already triggered efforts among some European buyers to secure replacement supplies. Poland’s Orlen SA has issued more than 10 tenders since Friday as it looks for alternative crude, according to Bloomberg.
European OECD countries imported about 577,000 barrels per day of Saudi crude in June, data cited by the International Energy Agency showed.
The latest attack comes against the backdrop of repeated strikes on Saudi energy and civilian infrastructure. Yemen-based Houthi militants have also threatened Saudi-linked shipping in the Red Sea, while Iran-backed groups in the region have targeted infrastructure linked to the wider conflict.
Oil prices, however, moved lower on Friday despite the latest supply concerns. Brent crude was down 1.6% at $103.17 a barrel, while US West Texas Intermediate fell 0.6% to $101.30.
Brent was headed for a 1.4% decline for the week, its first weekly loss in three weeks, as concerns over a prolonged disruption to Saudi supplies eased in the market.
With inputs from agencies
