Saudi Arabia has not commented on reports indicating the cancellation or postponement of crude oil shipments to European refineries following last week's drone attacks on the country's east-west pipeline. The extent of the disruption in deliveries to Europe is still unclear.
Disruption in Deliveries
The Argus energy pricing agency has reported that at least three European refineries are facing cancellations or delays of shipments that were scheduled for late September. According to unnamed sources in the market, these delays may continue until November.
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The Saudi Ministry of Energy announced a precautionary shutdown last Friday following drone attacks on this pipeline in the Riyadh and Medina regions the day before. Saudi and Iraqi officials stated that the drones were launched from Iraqi territory. The ministry has announced that technical teams are examining the pipeline, but it has not specified when pumping will resume.
Security and Economic Implications
This pipeline transports crude oil from eastern Saudi oil fields to the port of Yanbu on the Red Sea, allowing the country to bypass the Strait of Hormuz for its exports. Tankers departing from Yanbu to Europe head north towards the Suez Canal. The Sumed pipeline in Egypt also provides an alternative route for transporting crude oil from the Red Sea to the Mediterranean.
Oil reserves at export terminals can maintain the flow of shipments during the shutdown period. The duration of these reserves depends on the available volume and the speed of resuming shipments through the pipeline. Chris Wright, the U.S. Secretary of Energy, has stated that the disruption in this pipeline will last "a few days."
Meanwhile, the Saudi-led coalition announced on Wednesday that it intercepted a Houthi drone south of Mecca. The Houthis have denied targeting the city. Iranian-backed Houthis in Yemen took control of the Bab al-Mandab Strait in the Red Sea last week after seizing the port of Mocha and its surrounding islands.
The Bab al-Mandab Strait, located south of Yanbu and on the direct route to Asia, is considered a major passage for trade between Europe and Asia. Qatar has also warned that losing access to Bab al-Mandab will exacerbate the disruption currently affecting shipping traffic from the Strait of Hormuz.
Ibrahim bin Sultan Alhashimi, Director of Media and Communications at the Qatari Ministry of Foreign Affairs, called for international efforts to keep this waterway open at a press conference, stating that such a situation would be "catastrophic for the entire world."
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