Saudi Export Disruptions Send Oil Prices Soaring Above $130
Disruptions to Saudi exports have pushed oil futures and some physical cargoes to new highs. Crude loadings at Yanbu, a key Red Sea export hub in Saudi Arabia, were suspended on September 15. The move has raised concerns that the disruption could last for weeks.
Riyadh informed European customers that some late-September crude cargoes would be cancelled, exacerbating the supply squeeze. As a result, physical oil cargo prices rose above $130 per barrel, with North Sea Forties crude reaching $136.75, approaching its April record of $147.37.
Brent crude futures also surged to their highest settlements since May 19, settling at $108.75, while US West Texas Intermediate (WTI) gained $4.44 to $105.83 per barrel. Andy Lipow, president of Lipow Oil Associates, attributed WTI's larger gain to expectations that European refiners would replace cancelled Saudi shipments with US crude.
The physical shipments are due within a few weeks, while the nearby Brent futures contract is for November delivery. This disparity in delivery dates has contributed to the higher prices of physical cargoes compared to futures.