West Asia impact: Saudi Aramco halts European crude allocations after East-West pipeline attack
The sudden cut off to Europe mirrors similar emergency curtailments imposed on Asian buyers earlier in the week. Aramco indefinitely suspended term crude deliveries to Indian refiners, severing a supply line that accounts for nearly 9 percent of India’s total crude import basket.
- Sep 18, 2026,
- Updated Sep 18, 2026 9:18 PM IST
State-run oil giant Saudi Aramco has informed European refiners that they will receive zero crude oil under long-term term contracts next month, escalating a global supply squeeze triggered by a devastating drone attack on its primary export bypass pipeline.
The decision to cut off European term allocations for October follows targeted strikes by Iran-backed militias that shuttered the 1,200-km East-West pipeline on September 10.
The critical arterial line, capable of moving up to 7 million barrels per day across the Arabian Peninsula to the Red Sea port of Yanbu, had served as Saudi Arabia's primary mechanism to circumvent ongoing transit choking and ship attacks through the Strait of Hormuz. With key pumping stations sidelined for emergency repairs that could take up to six weeks, Aramco has seen its export routing capabilities severely restricted.
The total freeze on European supplies marks an aggressive tightening of Aramco's allocation strategy as it attempts to prioritize domestic processing and manage severe logjams. European refiners — which imported approximately 577,000 barrels per day of OECD-bound Saudi crude earlier this summer — are now forced to secure alternative spot barrels across West Africa, the Mediterranean, and the US Gulf Coast.
The sudden cut off to Europe mirrors similar emergency curtailments imposed on Asian buyers earlier in the week. Aramco indefinitely suspended term crude deliveries to Indian refiners, severing a supply line that accounts for nearly 9 percent of India’s total crude import basket.
While domestic Indian processors maintain near-term coverage through October, the simultaneous loss of contractual Saudi barrels in both Europe and Asia has rattled global oil markets. Brent crude benchmark prices surged past $108 a barrel before stabilising above $103, driven higher by mounting procurement costs and elevated tanker freight rates.
To maintain limited liquidity, Aramco has redirected small volumes into opportunistic spot market auctions via ship-to-ship transfers in the Gulf of Oman. However, market participants emphasize that spot market tenders offer none of the price stability or operational predictability of long-term term contracts.
State-run oil giant Saudi Aramco has informed European refiners that they will receive zero crude oil under long-term term contracts next month, escalating a global supply squeeze triggered by a devastating drone attack on its primary export bypass pipeline.
The decision to cut off European term allocations for October follows targeted strikes by Iran-backed militias that shuttered the 1,200-km East-West pipeline on September 10.
The critical arterial line, capable of moving up to 7 million barrels per day across the Arabian Peninsula to the Red Sea port of Yanbu, had served as Saudi Arabia's primary mechanism to circumvent ongoing transit choking and ship attacks through the Strait of Hormuz. With key pumping stations sidelined for emergency repairs that could take up to six weeks, Aramco has seen its export routing capabilities severely restricted.
The total freeze on European supplies marks an aggressive tightening of Aramco's allocation strategy as it attempts to prioritize domestic processing and manage severe logjams. European refiners — which imported approximately 577,000 barrels per day of OECD-bound Saudi crude earlier this summer — are now forced to secure alternative spot barrels across West Africa, the Mediterranean, and the US Gulf Coast.
The sudden cut off to Europe mirrors similar emergency curtailments imposed on Asian buyers earlier in the week. Aramco indefinitely suspended term crude deliveries to Indian refiners, severing a supply line that accounts for nearly 9 percent of India’s total crude import basket.
While domestic Indian processors maintain near-term coverage through October, the simultaneous loss of contractual Saudi barrels in both Europe and Asia has rattled global oil markets. Brent crude benchmark prices surged past $108 a barrel before stabilising above $103, driven higher by mounting procurement costs and elevated tanker freight rates.
To maintain limited liquidity, Aramco has redirected small volumes into opportunistic spot market auctions via ship-to-ship transfers in the Gulf of Oman. However, market participants emphasize that spot market tenders offer none of the price stability or operational predictability of long-term term contracts.