Europe's Oil Shortage Hits Home: Saudi Cuts Off Crude Supplies

European refiners are turning to American crude and diesel as Saudi Arabia informed them that they will receive no crude oil next month under long-term contracts. The decision applies to all European buyers, and six energy analysts told the Daily Caller News Foundation that they will replace part of those barrels with American crude.

The Strategic Petroleum Reserve held 285 million barrels in the week ending Sept. 11, its lowest level since 1982. This has led to a shortage in distillate stocks, which include diesel, standing 13% below the five-year average.

American crude exports averaged 4.8 million barrels a day in the week ending Sept. 11, and energy analysts expect European refiners to bid for American diesel and gasoline as well. However, David Blackmon, an energy analyst and writer, noted that most American exports are light, sweet crude from shale fields, which may not be suitable for European refineries.

Ellen Wald, a nonresident senior fellow at the Atlantic Council's Global Energy Center, stated that European refiners will look to replace September and October supplies with other crude or with gasoline and diesel. This could push crude oil prices higher, as U.S. products markets are already very tight.