Saudi Arabia cuts oil shipments to Europe after pipeline attacks

Saudi Arabia has cut oil shipments to Europe after drone attacks damaged a key export pipeline to the Red Sea, forcing major customers, including Poland, to seek alternative supplies as crude cargo prices climbed above $120 a barrel, trade sources told Reuters.

Saudi Arabia blamed Iraqi militia groups for the attacks, which prompted the kingdom to shut its East-West oil pipeline on September 11. The pipeline had provided an alternative export route during the disruption caused by the closure of the Strait of Hormuz over the past six months.

Oil trading and shipping sources said on September 15 that Saudi Arabia had informed European customers that some crude cargoes scheduled for loading in September would be cancelled. Oil loadings at the Red Sea port of Yanbu have also been suspended, according to the sources.

The disruption to Saudi oil flows through the Red Sea is expected to push the kingdom to seek alternative routes for exports.

Trading sources said Saudi Arabia could increase shipments through the Strait of Hormuz using so-called dark shipments, similar to methods already being used by the United Arab Emirates and Iraq.

Such shipments have enabled Gulf oil producers to continue exporting between 7 million and 9 million barrels of oil per day, equivalent to around 30% to 40% of their pre-war export volumes, according to the sources.

By Sabina Mammadli