After the Saudi pipeline attack, the country expanded its Gulf exports: seven super tankers loaded 14 million barrels; Brent crude broke $100 intraday while WTI fell over 6%.

On September 13, drone attacks forced Saudi Arabia to shut down its east-west oil pipeline, halting all crude loading operations at the Yanbu port on the Red Sea coast. Yet, within less than a week, Saudi Aramco completed a large-scale rerouting of its export flows—a speed that exceeded the expectations of some market participants. According to data from Vortexa cited by Reuters, Saudi crude loading volumes via the Gulf route averaged approximately 3.7 million barrels per day since September 12—up from about 2.9 million bpd earlier in the month. Meanwhile, average loading volumes via the Red Sea route between September 1 and 11 stood at roughly 3.9 million bpd. In a report released last Friday, JPMorgan analysts noted that satellite data showed Saudi crude flows through the Strait of Hormuz had risen to an average of 2.9 million bpd over the past six days—up sharply from just 700,000 bpd in August. The loading of approximately 14 million barrels in a single day last Sunday further confirmed Saudi Arabia’s swift ability to shift export focus toward Gulf ports—and signaled that the duration of this supply disruption may be shorter than the market’s previously most pessimistic forecasts. Oil Price Retreat: Geopolitical Premium Erosion Meets Diplomatic Expectations Brent crude briefly fell below $100 intraday, driven by two converging forces: improved supply expectations following partial restoration of Saudi exports, and a retreat in geopolitical premium triggered by renewed diplomatic prospects between the U.S. and Iran. Bob Yawger, Director of Energy Futures at Mizuho, stated that just days earlier, the possibility of U.S.-Iran talks still seemed extremely remote—'This is a step in the right direction.' According to Al Jazeera, Iran has conveyed conditions for resuming negotiations through mediators, a point confirmed by Iranian security official Mohsen Rezaei. Notably, actual conflict in the Middle East has not ceased. Yemen’s Houthi movement claimed attacks on Saudi Aramco facilities in Riyadh and the Red Sea city of Yanbu, and continues advancing military operations along the Red Sea coast. A report published last Thursday, September 17, citing Iranian sources, stated that after Saudi Arabia sought assistance, a major power had requested Iran’s help in restraining the Houthis. Geopolitical uncertainty remains—but market pricing has shifted its focus from risk premium to supply recovery expectations. Sales Strategy Shifts Eastward: Asian Refineries Benefit, European Supplies Tighten Following the pipeline disruption, Saudi Aramco adjusted its sales strategy markedly: canceling some crude cargo sales to European customers while increasing shipments loaded from eastern ports along the Strait of Hormuz and destined for Asian markets. As reported by media last week, citing trade sources, Saudi Arabia will sell around 60 million barrels of crude from Ras Tanura port this month and next, with deliveries completed via ship-to-ship transfers at Sohar port in Oman. This arrangement means Asian refineries will receive more abundant supplies of Saudi crude, while European buyers face a temporary tightening of supply—forcing them either to seek alternative sources or absorb spot premium pressure. For Asian refiners, the arrival of additional Saudi supply coincides with falling oil prices, easing procurement cost pressures. However, ship-to-ship transfers also introduce greater logistical complexity and uncertainty regarding port arrival timing.

Libya shuts down oil fields and pipelines, causing daily oil production to fall by 550,000 barrels.

Libya’s National Oil Corporation (NOC) announced late Saturday that the main pipeline linking the eastern Samah and Dhuhra oilfields to the country’s largest export terminal, Es Sider, would be shut down for maintenance. Libya expects its oil output to decline by another 200,000 barrels per day over the coming week. This shutdown follows another production halt less than two weeks earlier, when militias closed the Sharara field—the country’s largest—cutting output by about 350,000 bpd. Taken together, these closures will push Libya’s oil production to its lowest level in over a year. Libya holds Africa’s largest proven oil reserves, and any drop in its output could offset efforts by the Organization of the Petroleum Exporting Countries and its partners (OPEC+) to boost exports. According to a Bloomberg survey, OPEC+ is scheduled to hold a meeting on Tuesday and may decide to continue its monthly production increase of 400,000 bpd. Libya produced an average of 1.2 million barrels per day last year. However, its National Oil Corporation warned that it lacks the funding required to sustain even this output level—let alone achieve its goal of reaching 2 million bpd within six years.

Armed group shuts valve on Libya's Sharara crude pipeline, cuts output, NOC says

15 hours ago

An armed group closed valve 7 on Libya's Sharara crude pipeline, sharply reducing output at the major oilfield, according to the National Oil Corporation.

reuters

2026-09-21

Armed group shuts valve on Libya's Sharara crude pipeline, cuts output, NOC says

Armed group shuts valve on Libya's Sharara crude pipeline, cuts output, NOC says

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