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2026-09-18 20:38:09
[Saudi Crude Oil Supply Disruption to Europe: European Refineries Face a Major Test Before Winter] ⑴ Saudi Aramco has notified at least two European refineries that they will not receive crude oil deliveries next month; this decision reportedly applies to all European buyers. ⑵ The market had previously hoped that Saudi Arabia's east-west pipeline would restore about half of its capacity and resume loading to Europe, but this hope was dashed before the weekend. ⑶ This pipeline, bypassing the Strait of Hormuz and transporting crude oil to Red Sea export terminals, is crucial for restoring European energy supplies. ⑷ The supply disruption will force refineries to seek alternative sources in other regions and push up crude oil prices in the international market. ⑸ This could increase feedstock costs, adding pressure to the European refined product market before the Northern Hemisphere winter. ⑹ The latest data from the International Energy Agency shows that OECD countries imported approximately 577,000 barrels of Saudi crude oil per day in June. ⑺ Some European buyers have already begun scrambling for supplies; Örön, Poland, issued more than 10 tenders this week seeking alternative supplies. (8) The shutdown of the east-west pipeline due to the drone attack earlier this month has significantly impacted the oil market, which had already seen Brent crude futures break through $100 per barrel. (9) Saudi Arabia had been operating this 7 million barrel per day pipeline at full capacity since the US-Iran conflict. (10) The turmoil in the Middle East has led JPMorgan's commodities chief to admit that this is the first time since the Iranian conflict that there is no baseline scenario, making it difficult to model the endgame. (11) On Friday, Brent crude traded at around $103, WTI at around $101, and the US diesel crack spread at around $112. (12) The global refining crisis is raising concerns about a repeat of the 2008 gasoline shock, and tight diesel and natural gas inventories limit the margin for error during the winter.
