Saudi Aramco has told at least two European refining customers they will receive no crude oil in October following damage to the kingdom’s key East-West pipeline, while gold prices rose and oil prices eased as investors assessed the latest developments in the Middle East.
At the same time, Bitcoin jumped 6% on September 18, briefly moving above $81,000 after trading around $77,000-$78,000 for most of the week, with the cryptocurrency also benefiting from the US Securities and Exchange Commission’s new framework for tokenized stocks.
Saudi Aramco halts oil deliveries to Europe
Saudi Aramco has informed at least two European refining customers that they will receive no crude deliveries next month after an attack damaged Saudi Arabia’s East-West pipeline, Bloomberg reported.
European refiners normally receive Saudi crude under term contracts that provide regular monthly supplies, but the reported decision means those deliveries will not take place in October and applies to European buyers, according to the report.
The 1,200-kilometre East-West pipeline can transport up to 7 million barrels of oil per day from Saudi Arabia’s eastern oil fields to the Red Sea port of Yanbu.
The pipeline has been shut since a September 10 drone attack damaged pumping infrastructure.
Reuters reported that three pumping stations were damaged, one more than initially assessed.
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 seeking alternative supplies from the North Sea and other sources.
Poland’s Orlen, which relies on Saudi Arabia for around 40% of the crude feedstock across its three refineries, has issued more than 10 tenders since last Friday for alternative supplies.
Gold prices rebound
Gold prices rose to a one-week high on Friday as easing oil prices reduced some concerns about prolonged inflationary pressure, with spot gold up 0.88% at $4,378.49 an ounce.
US gold futures settled 0.45% higher at $4,419.40, while silver rose 2.3% to $66.70, platinum gained 2.2% to $1,812.50 and palladium increased 1.5% to $1,310.20.
Gold’s gains came despite a stronger dollar and higher US interest rates, which can reduce the appeal of non-yielding assets.
The Federal Reserve raised rates by 25 basis points to 3.75%-4% on Wednesday, while traders saw a 55% chance of another hike in October.
Oil prices retreat
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.
Saudi Arabia has been working to reroute some crude exports through the Strait of Hormuz, while China reportedly asked Iran to limit attacks by Houthi rebels on Saudi oil infrastructure.
However, the physical oil 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 remained largely disrupted, with only four commodities vessels passing through on Thursday compared with a 10-day average of about 16, according to preliminary shipping data.
Bitcoin breaks above $81,000
Bitcoin jumped 6% on September 18, crossing $81,000 after spending most of the week between $77,000 and $78,000.
The move followed the SEC’s September 17 announcement of a five-year exemption allowing certain platforms to facilitate on-chain trading of tokenized stocks.
The exemption provides a regulatory pathway for eligible platforms to offer blockchain-based versions of traditional equities, with tokenized securities required to provide holders with the same rights and privileges as equivalent traditional shares.
The Bitcoin rally also came as oil prices pulled back, easing some of the inflation concerns that had weighed on risk assets.
The move followed the Senate’s failure earlier in the week to advance the CLARITY Act, which would have established a broader regulatory framework for digital assets.
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