Saudi Arabia Shifts to Spot Oil Sales After Key Pipeline Closure
Saudi Arabia has begun selling up to 20 million barrels of crude oil in the spot market this week, following the shutdown of its key East-West pipeline. The closure was caused by drone attacks near the Iranian border last Thursday. With the pipeline offline, Saudi Aramco is now offering cargoes for pickup outside the Strait of Hormuz via ship-to-ship transfers in the Gulf of Oman to avoid sending tankers into the Persian Gulf. The main buyers have been Chinese refiners and other East Asian crude processors. This shift has led to some September deliveries being canceled or delayed, particularly affecting European refiners who previously relied on shipments routed through the pipeline. The United Arab Emirates (UAE) has played a supporting role in facilitating these transfers using its experience with prompt supply operations. The move highlights Saudi Arabia's efforts to maintain oil exports despite regional disruptions and underscores growing reliance on alternative shipping routes amid ongoing geopolitical tensions.
Topics: oil supply pipeline shutdown spot market sales Strait of Hormuz