Saudi Pipeline Damage Sends Oil Prices Reeling Amid Global Supply Disruptions
Saudi Aramco has informed at least two European refining customers that they will receive no crude deliveries in October due to damage sustained by the kingdom's East-West pipeline. The pipeline, which can transport up to 7 million barrels of oil per day, was damaged in a September 10 drone attack. Saudi Arabia is seeking to restore about half of the pipeline's capacity within days, although estimates for a full recovery range from several weeks to longer.
European refiners are scrambling to find alternative supplies from the North Sea and other sources. Poland's Orlen, which relies on Saudi Arabia for around 40% of its crude feedstock, has issued more than 10 tenders since last Friday for alternative supplies. Brent crude fell 1.56% to $103.19 a barrel, while West Texas Intermediate declined 2.17% to $99.7 as concerns about Saudi supply disruptions eased.
Meanwhile, gold prices rose to a one-week high on Friday as easing oil prices reduced some concerns about prolonged inflationary pressure. Gold's gains came despite a stronger dollar and higher US interest rates, which can reduce the appeal of non-yielding assets. Bitcoin jumped 6% on September 18, briefly crossing $81,000 after trading around $77,000-$78,000 for most of the week.