Saudi Arabia is boosting prompt spot sales of crude oil to Asian refiners from locations just outside the Strait of Hormuz following the recent shutdown of its East-West pipeline. This pipeline, which normally carries oil across the kingdom to its Red Sea coast, was halted due to drone attacks, prompting the pivot in export strategy.
Saudi Aramco has reportedly sold approximately 20 million barrels of crude this week for pickup in the current and following month. Buyers include state-owned and independent processors in China, as well as other importers across East Asia. This move aims to compensate for the disruption caused by the pipeline's closure and ensure continued supply to key markets.
The East-West pipeline had been crucial for Saudi Arabia in diverting crude to the Red Sea port of Yanbu for export, especially since the Iran war significantly restricted shipping through the Strait of Hormuz. The pipeline's damage and subsequent shutdown on a Friday led to global oil benchmarks reaching multi-month highs, underscoring the importance of this infrastructure for global oil supply.
