Saudi Aramco cancels October crude allocations to European refiners: Report

Saudi Aramco informed at least two European refining customers that they will receive no crude oil in October following an attack on the kingdom’s key pipeline to the Red Sea, Bloomberg reported Friday.

The decision applies to all European buyers, said the report, citing those familiar with the matter who requested anonymity because the information is not public.

European refiners typically receive Saudi crude under term contracts that provide regular monthly supplies.

Saudi Aramco did not immediately respond to a request for comment made outside normal business hours, according to the report.

Saudi Arabia shut its East-West pipeline last week after the facility was targeted by drones. The pipeline is expected to resume partial operations within days and return to full capacity within six weeks, Bloomberg reported Wednesday.

READ: Oil prices jump more than 6%, Brent crude tops $107

The pipeline, also known as Petroline, transports crude from Saudi Arabia’s main eastern production areas to the Red Sea coast, allowing supplies to bypass the Strait of Hormuz.

European refineries generally receive Saudi crude through Egypt’s Mediterranean port of Sidi Kerir, which is linked to the Red Sea by the SUMED pipeline.

The suspension of the Saudi route prompted some European refiners to seek alternative supplies. Polish refiner Orlen has issued more than 10 tenders since Friday as it moves to secure replacement barrels, said the report.

European members of the Organization for Economic Cooperation and Development imported an average of 577,000 barrels per day of Saudi crude in June, according to an International Energy Agency’s latest Oil Market Report.

READ: US imports of Saudi crude fall to zero for first time since 1985 amid Iran conflict