Saudi Pipeline Attack Disrupts Middle East Crude Supplies, Pushing Asian Buyers to Lock in Cargoes Ahead of Schedule

A Saudi oil pipeline attack has disrupted Middle East crude supplies, prompting Asian refiners to buy cargoes ahead of schedule. The East-West Pipeline, which spans over 1,200 kilometers across the Arabian Peninsula, was shut down following a drone attack. This has created a potential supply gap of approximately 4 million barrels per day, representing about 4% of global output.

Japanese refiners Eneos Holdings and Idemitsu Kosan have purchased Omani crude for loading as early as October, paying $38 per barrel premium over the Dubai benchmark. This is a month earlier than their normal procurement timeline. Other Asian buyers, including China's Shandong Dongming Petrochemical and Shenghong Group, have also secured Middle East crude for October-to-November delivery.

The pipeline closure has pushed Persian Gulf crude spot premiums far above normal levels. Red Sea exports have plummeted by 4.5 million barrels per day compared to July. The volume of immediately available cargoes has dropped sharply, forcing buyers to pay higher premiums in exchange for loading-date certainty.