West Asia war: Saudi Aramco halts crude shipments to Indian refiners indefinitely after pipeline strike

Drone strikes on Saudi Arabia’s critical East-West pipeline have forced state energy titan Saudi Aramco to suspend crude oil supplies to Indian refiners until further notice. The sudden halt cuts off a supply line that has accounted for nearly 9 percent of India’s total crude imports, compounding the severe transit bottlenecks already choking energy shipments through the Strait of Hormuz.

The 1,200-kilometer East-West pipeline — capable of pumping up to 7 million barrels per day from Saudi Arabia's eastern oilfields to its Red Sea port at Yanbu — had served as the kingdom's primary bypass around the troubled Strait of Hormuz.

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ollowing targeted strikes on two pumping stations, Saudi authorities shuttered the arterial conduit for emergency repairs, leaving Aramco with severely restricted shipping avenues.

While Indian refiners maintain that securing physical replacement barrels will not trigger immediate volume shortfalls, the disruption strikes at a moment when global energy markets are severely strained. Brent futures surged past $108 a barrel this week, while tanker freight rates hover near historical highs. The price squeeze is further exacerbated by the fading of steep discounts on Russian crude, leaving domestic processors with diminished options to hedge against rising import costs.

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To meet immediate processing targets, Aramco has reportedly redirected limited volumes into spot market auctions, where risk-tolerant traders are orchestrating ship-to-ship transfers through the Gulf of Oman to deliver small consignments. However, these opportunistic spot purchases lack the volume predictability and contractual price stability of long-term Aramco supply agreements.

With near-term processing schedules covered through October, Indian refiners are turning to alternative term suppliers across the United States, West Africa, and Latin America to lock in November deliveries, even as elevated procurement costs threaten to erode refining margins.

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The closure of the Saudi East-West Pipeline is likely to make India go for further diversification of crude, with Russian crude becoming very important to meet the country’s demand, after a 26% drop in August, according to experts.