Saudi Arabia has remained silent in response to reports of cancellations or delays in oil shipments to European refineries. These developments have occurred following drone attacks on the East-West pipeline in Saudi Arabia, and the extent of the disruption in oil deliveries to Europe is still not clearly defined.
Cancellations and Impact on Europe's Energy Industry
According to reports, at least three European refineries have canceled or postponed shipments that were scheduled for late September. Market sources indicate that some of these shipments may be delayed until November. Following these reports, Saudi Arabia's state oil company, Aramco, did not respond to media inquiries via email and stated that it would refrain from commenting on the matter.
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The Saudi Ministry of Energy announced on Friday, following the drone attacks on the pipeline, that it had temporarily closed the pipeline as a precaution. Saudi and Iraqi officials stated that the drones originated from Iraq. Currently, technical teams are assessing the status of the pipeline, but the timeline for resuming oil pumping remains unclear.
Oil Routes and Global Challenges
The East-West pipeline in Saudi Arabia transports crude oil from the eastern oil fields of the country to the port of Yanbu on the Red Sea, facilitating oil exports to Europe. This pipeline is particularly important for bypassing the Strait of Hormuz. From Yanbu, tankers head north towards the Suez Canal. Additionally, Egypt's SUMED pipeline provides another route for transporting oil from the Red Sea to the Mediterranean.
Oil reserves at export terminals can move shipments during a shutdown. However, the duration of these reserves depends on the inventory levels and the speed of resuming deliveries. U.S. Energy Secretary Chris Wright stated on Tuesday that disruptions in this pipeline are typically measured "in days."
As tensions in the region have escalated, the Saudi-led coalition announced that it shot down a Houthi drone south of Mecca on Wednesday night. The Houthis denied targeting the city. Last week, Iranian-backed Houthis took control of the Bab al-Mandab Strait in the Red Sea and seized the port of Al-Mokha and nearby islands from the Saudi-backed government in Yemen.
The Bab al-Mandab Strait is located south of Yanbu and is a key route for trade between Europe and Asia. If this area is threatened, further disruptions in transportation through the Strait of Hormuz will occur. Ibrahim bin Sultan Al-Hashimi, media and communications director at the Qatari Ministry of Foreign Affairs, warned on Tuesday in Doha that losing access to Bab al-Mandab could have catastrophic consequences for the entire world and called for international efforts to secure this waterway.
Meanwhile, Saudi Crown Prince Mohammed bin Salman and Egyptian President Abdel Fattah el-Sisi discussed the security of maritime routes in the region on Tuesday in Cairo. El-Sisi stated that the security of Saudi Arabia and the Gulf is part of Egypt's national security and supported Saudi actions to protect the country while calling for a political agreement in Yemen.
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