New Delhi: Saudi Aramco has suspended crude oil deliveries to Indian refiners until further notice, The Economic Times reported on Friday. The suspension follows an attack on the company's East-West pipeline, the line that carries crude across the Arabian Peninsula from the kingdom's eastern fields to its Red Sea coast.
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The 1,200-km pipeline was taken out of service on Thursday. Drone attacks by Iran-backed militias operating out of Iraq forced the closure. Its loss lands on a supply route that had already been carrying more than its usual share. Earlier this year, Saudi Arabia was running the line at its full capacity of 7 million barrels a day, after Iranian attacks on ships brought traffic through the Strait of Hormuz to a near standstill. The pipeline was the way around Hormuz, and that way around is now closed.
The pipeline is not the only Saudi energy infrastructure under fire. Through this month the kingdom has absorbed a run of strikes on energy and civilian sites along its western Red Sea coast, launched by Houthi militants based in Yemen. The same group has threatened Saudi shipping in the Red Sea.
The market did not extend its gains on Friday. Brent futures fell USD 1.65, or 1.6 percent, to USD 103.17 a barrel. US West Texas Intermediate (WTI) slipped 0.6 percent to USD 101.30. Brent was tracking its first weekly loss in three weeks, down about 1.4 percent over the week.
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India's own benchmark had already crossed the USD 100 mark before the pipeline went down. The Indian Basket was assessed at USD 101.07 a barrel on September 6, its first close above USD 100 since May. It averaged USD 99.38 a barrel over September to that point, against USD 90 in August, USD 82 in July and USD 83 in June. The Indian Basket is a derived benchmark rather than a traded price, built by the Petroleum Planning and Analysis Cell (PPAC) from Dated Brent on the sweet side and an Oman-Dubai average on the sour side.