/images/ppid_59c68470-image-178974502558948827.webp)
What is the story about?
Saudi Aramco has told at least two oil refining customers in Europe that they will receive no crude next month under long-term supply agreements after the kingdom’s key pipeline to the Red Sea was attacked, Bloomberg reported, citing people familiar with the decision.
European customers normally receive Saudi Arabian crude under term contracts, which ensure a steady flow of supply every month. The deliveries will not take place next month, the people said, adding that the decision applies to all European buyers.
The development comes as Saudi Arabia faces disruptions to its oil production and supply amid escalating attacks in the region.
Earlier this month Saudi Arabia had told OPEC that its crude production fell by 1.9 million barrels a day last month to 6.238 million barrels a day, according to an OPEC monthly report cited by Bloomberg.
That put Saudi output at its lowest level since 1990 and below its previous wartime low, according to the information provided.
The supply disruption is also prompting European oil companies to look for alternative sources. Poland’s Orlen SA, the biggest oil company in the European Union’s east, is seeking to diversify its crude supplies as deliveries from Saudi Arabia are disrupted.
Orlen CEO Ireneusz Fafara said the company has been active in the spot cargo market to replace deliveries halted by a drone strike on a Saudi pipeline carrying crude via the Red Sea to Europe and beyond.
“We have excellent relations with Aramco and we are very satisfied with them. They are a very credible partner,” Fafara said, as reported by Bloomberg.
He said the search for potential new sources of supply and ways to increase Orlen’s own reserves was a result of the geopolitical situation.
Orlen gets about half of its crude requirements from Saudi Aramco. It had increased supplies from the kingdom as it sought to reduce its historic reliance on Russia and strengthened cooperation with Aramco earlier this decade by selling the Saudi company a stake in a refinery in the Baltic port of Gdansk.
The latest disruption comes as concerns grow over Saudi Arabia’s oil production and the availability of its crude to global buyers amid the escalating conflict.
Also Read: FSSAI initiates legal action against Nestlé India over baby nutrition products
European customers normally receive Saudi Arabian crude under term contracts, which ensure a steady flow of supply every month. The deliveries will not take place next month, the people said, adding that the decision applies to all European buyers.
The development comes as Saudi Arabia faces disruptions to its oil production and supply amid escalating attacks in the region.
Earlier this month Saudi Arabia had told OPEC that its crude production fell by 1.9 million barrels a day last month to 6.238 million barrels a day, according to an OPEC monthly report cited by Bloomberg.
That put Saudi output at its lowest level since 1990 and below its previous wartime low, according to the information provided.
The supply disruption is also prompting European oil companies to look for alternative sources. Poland’s Orlen SA, the biggest oil company in the European Union’s east, is seeking to diversify its crude supplies as deliveries from Saudi Arabia are disrupted.
Orlen CEO Ireneusz Fafara said the company has been active in the spot cargo market to replace deliveries halted by a drone strike on a Saudi pipeline carrying crude via the Red Sea to Europe and beyond.
“We have excellent relations with Aramco and we are very satisfied with them. They are a very credible partner,” Fafara said, as reported by Bloomberg.
He said the search for potential new sources of supply and ways to increase Orlen’s own reserves was a result of the geopolitical situation.
Orlen gets about half of its crude requirements from Saudi Aramco. It had increased supplies from the kingdom as it sought to reduce its historic reliance on Russia and strengthened cooperation with Aramco earlier this decade by selling the Saudi company a stake in a refinery in the Baltic port of Gdansk.
The latest disruption comes as concerns grow over Saudi Arabia’s oil production and the availability of its crude to global buyers amid the escalating conflict.
Also Read: FSSAI initiates legal action against Nestlé India over baby nutrition products
/images/ppid_59c68470-image-178982753019621664.webp)
/images/ppid_59c68470-image-17896650884977305.webp)