Saudi Aramco has informed at least two European refining customers that they will receive no crude oil in October, following damage to the kingdom's key East-West pipeline. The move, reported by Bloomberg, comes after a September 10 drone attack disrupted pumping infrastructure, with Reuters indicating three pumping stations were damaged—one more than initially assessed.
The 1,200-kilometre East-West pipeline, capable of transporting up to 7 million barrels per day from Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu, has been shut since the attack. Saudi Arabia is working to restore about half of the pipeline's capacity within days, though full recovery estimates range from several weeks to longer.
European refiners, typically reliant on term contracts for regular monthly Saudi crude, are now seeking alternative supplies from the North Sea and other sources. Poland's Orlen, which depends on Saudi Arabia for around 40% of its crude feedstock across three refineries, has issued more than 10 tenders since last Friday for replacement cargoes.
In commodities, gold prices climbed to a one-week high on Friday as easing oil prices tempered inflation concerns. Spot gold rose 0.88% to $4,378.49 an ounce, while US gold futures settled 0.45% higher at $4,419.40. Silver gained 2.3% to $66.70, platinum advanced 2.2% to $1,812.50, and palladium increased 1.5% to $1,310.20. Gold's strength persisted despite a firmer dollar and higher US interest rates, which typically weigh on non-yielding assets. The Federal Reserve raised rates by 25 basis points to 3.75%-4% on Wednesday, with traders pricing a 55% chance of another hike in October.
Oil prices retreated as supply disruption concerns eased. Brent crude fell 1.56% to $103.19 a barrel, while West Texas Intermediate declined 2.17% to $99.70. Saudi Arabia has been rerouting some exports through the Strait of Hormuz, and China reportedly asked Iran to limit Houthi attacks on Saudi infrastructure. However, the physical market remains tight, with some European crude cargoes trading above $130 a barrel and North Sea Forties reaching $136.75. The Strait of Hormuz also saw reduced traffic, with only four commodities vessels passing through on Thursday versus a 10-day average of about 16.
In digital assets, Bitcoin jumped 6% on September 18, briefly surpassing $81,000 after trading between $77,000 and $78,000 for most of the week. The rally followed the SEC's September 17 announcement of a five-year exemption allowing certain platforms to facilitate on-chain trading of tokenized stocks. This regulatory pathway enables blockchain-based versions of traditional equities, with tokenized securities required to provide holders the same rights as equivalent shares. The move also came as oil prices pulled back, easing inflation concerns that had weighed on risk assets. Earlier in the week, the Senate failed to advance the CLARITY Act, which would have established a broader regulatory framework for digital assets.
For investors, the intersection of geopolitical supply risks, monetary policy, and evolving crypto regulation continues to shape market dynamics. As Saudi Aramco's delivery halt ripples through European energy markets, attention turns to alternative supply routes and the potential for sustained price pressure. Meanwhile, Europe's stock market outlook may be influenced by these energy developments. In the crypto space, the SEC's tokenized stock framework could open new avenues for institutional participation, as highlighted in recent market digests. The broader implications for inflation and central bank policy remain key watchpoints.
This article is for informational purposes only and does not constitute financial advice.
