Oil falls below $100 as Saudi workarounds ease pipeline concerns

  • Saudi Aramco withheld October crude from European refining customers after the pipeline attack.
  • Saudi Arabia moved 2.8 million barrels daily through Hormuz over six days, versus 700,000 in August.
  • Orlen issued more than 10 tenders as European refiners sought replacement Saudi crude.

Crude oil fell below $100 a barrel on Friday, extending its decline to a third session as Saudi Arabia increased alternative export flows and reports pointed to a partial restoration of the damaged East-West Pipeline. Oil prices declined 0.5% for the week after reaching four-month highs earlier. Saudi Aramco informed at least two European refining customers that they would receive no crude in October, and the decision applies to all European buyers, according to Bloomberg. European refiners typically receive Saudi crude through term contracts that provide regular monthly supplies. Satellite imagery indicated Saudi Arabia moved 2.8 million barrels a day through the Strait of Hormuz during the previous six days, compared with 700,000 barrels a day in August. The kingdom has reportedly sold up to 60 million barrels from Ras Tanura for September and October loading through ship-to-ship transfers outside the strait. The East-West Pipeline, also known as Petroline, is expected to resume partial operations within days and return to full capacity within six weeks. The suspension has prompted European refiners to seek replacement supplies, with Poland's Orlen issuing more than 10 tenders since Friday. European OECD members imported an average of 577,000 barrels a day of Saudi crude in June, according to the International Energy Agency.

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